I call to order this meeting of the Standing Committee on Transport, Infrastructure and Communities.
Welcome to everyone.
We gather today to study three departmental plans for agencies that fall under the purview of the Minister of Transport, as well as the main estimates 2019-20.
A number of votes were referred to the committee for discussion on Thursday, April 11, 2019, namely votes 1 and 5 under Canadian Air Transport Security Authority; vote 1 under Canadian Transportation Agency; votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50 under the Department of Transport; vote 1 under Marine Atlantic Incorporated; vote 1 under the Federal Bridge Corporation Limited and vote 1 under VIA Rail.
We are delighted to welcome the Honourable Marc Garneau, Minister of Transport, along with his officials. They are Michael Keenan, Deputy Minister; Kevin Brosseau, Assistant Deputy Minister for Safety and Security; Anuradha Marisetti, Assistant Deputy Minister for Programs and André Lapointe, Chief Financial Officer.
For the Canadian Air Transport Security Authority, we have Mike Saunders, President and Chief Executive Officer, as well as Nancy Fitchett, Acting Vice-President for Corporate Affairs and Chief Financial Officer. Welcome back.
For the Canadian Transportation Agency, we have Scott Streiner, Chair and Chief Executive Officer, and Manon Fillion, Secretary and Chief Corporate Officer.
For Marine Atlantic, we have Murray Hupman, President and Chief Executive Officer, and Shawn Leamon, Vice-President of Finance.
Finally, for VIA Rail Canada, we have Jacques Fauteux, Director of Government and Community Relations.
Welcome, everyone, to our committee. Thank you for coming.
I'll start the discussion by calling vote 1 under the Canadian Air Transport Security Authority.
Minister Garneau, it's over to you for five minutes. I know that you're not feeling well today, and we really appreciate the fact that you're here with us today.
Thank you very much, Madam Chair. I know that people would have been very disappointed if I weren't here today.
Voices: Oh, oh!
Hon. Marc Garneau: I'm delighted to be here today. If I occasionally cough and splutter, please don't worry. I'm alive and well. I don't want to make a habit of having a cold when I come here, but I am fine. Thank you.
Madam Chair and members of the committee, thank you for the invitation to meet with you today. I am joined by the people you have already mentioned.
There is a great deal of important work being done in the federal transportation portfolio, which includes Transport Canada, crown corporations, agencies and administrative tribunals.
Regarding this year's main estimates, I will begin by mentioning that for the fourth year Transport Canada is involved in a pilot project, as we assess how effective it is to link grants and contribution votes to their purpose.
To help the parliamentary study of the estimates and the scrutiny of government expenditures overall, planned Transport Canada expenditures are presented in the main estimates for 2019-20 in accordance with the department's results framework.
The overarching goal at Transport Canada is to ensure that our transportation system is safe and secure, efficient, green and innovative. We work towards this goal by proposing laws, policies and regulations; monitoring and inspecting the transportation industry to ensure that these laws, policies and regulations are respected; and funding projects to strengthen the transportation network. We also collaborate with a variety of partners, including indigenous peoples, industry, provincial and territorial governments, and international bodies.
Transport Canada's main estimates for 2019-20 total $1.86 billion. That total can be broken down into four categories, which are $879 million under “Efficient Transportation”, $374 million under “Safe and Secure Transportation”, $252 million under “Green and Innovative Transportation” and $194 million for “Internal Services.” There is also $162 million for new budget 2019 items.
This is an interesting and exciting time for transportation in Canada. Innovation is delivering new opportunities and new challenges. In response, we are allocating resources to address these challenges, and we are always seeking ways to take advantage of new opportunities to make transportation safer, more secure, and more efficient, with less impact on the environment.
Budget 2019 announced a $300-million commitment for a new incentive program for zero-emission vehicles to help us achieve our targets for new light-duty vehicles in Canada of 10% by 2025, 30% by 2030, and 100% by 2040. The first portion of that amount, $71 million for the 2019-20 fiscal year, is included in these main estimates.
Transport Canada is also requesting $2.1 million in these main estimates for protecting critical cyber systems in the transportation sector. Budget 2019 announced more than $12 million over three years to implement the modernized Motor Vehicle Safety Act. This includes using fines to increase safety compliance, and more flexibility to support safe testing and deployment of innovative technologies.
Budget 2019 also allocated nearly $46 million dollars over three years to support innovation and modernization of Transport Canada's regulatory regime. This would affect commercial testing of remotely piloted aircraft systems beyond visual line of sight, cooperative truck platooning pilot projects, and an enhanced road safety transfer payment program.
I will also provide some highlights from these main estimates for federal agencies and Crown corporations in my portfolio.
The Canadian Air Transport Security Authority (CATSA) is seeking $875 million, to continue to protect travellers with effective, consistent and high-quality security screening.
Budget 2019 included $288 million for fiscal year 2019-20, to continue securing critical elements of the air transportation system, to protect the public.
Budget 2019 also announced our intention to advance legislation that would enable us to sell the assets and liabilities of CATSA to an independent, not-for-profit entity. The funding envelope for 2019-20 includes transition resources to support this corporate structure change.
Marine Atlantic is seeking nearly $153 million for year-round constitutionally mandated ferry service between North Sydney, Nova Scotia, and Port Aux Basques, Newfoundland and Labrador, as well as non-mandated seasonal service between North Sydney and Argentia, Newfoundland and Labrador.
Marine Atlantic brings more than a quarter of all visitors to Newfoundland, and two-thirds of all freight, including 90% of perishables and time-sensitive goods. Marine Atlantic service is vital to the interests of companies that do business in that region and to the people who travel to and from the island of Newfoundland. Budget 2019 mentioned that we will extend support for existing ferry services in eastern Canada and will look to procure three new modern ferries, including one for Marine Atlantic.
VIA Rail Canada is requesting almost $732 million in these main estimates. As our national passenger rail carrier, VIA Rail's objective is to provide a safe, secure, efficient, reliable, and environmentally sustainable passenger service. ln addition to trains that run through the Quebec City—Windsor corridor, and long-haul trains between Toronto and Vancouver and between Montreal and Halifax, this also includes passenger rail service to regional and remote communities, some of which have no access to alternative year round transportation.
ln conclusion, the financial resources outlined in these main estimates will help these agencies, Crown corporations, and Transport Canada to maintain and improve our transportation system. Our transportation system is vital for our economy, and for our quality of life. It is vital for our safety and security. And by making improvements to our transportation system, we are making it safer and more secure.
And we are also creating good, well-paying jobs for the middle class, and ensuring a better quality of life for all Canadians.
I would now be happy to answer any questions you may have.
Thank you very much, Madam Chair.
I want to thank you as well, Minister, and your departmental staff, for joining us today.
Where does one begin with the opportunity to question you on the main estimates, the departmental report on plans and priorities and the Canadian Transportation Agency, as well as the Canadian Air Transport Security Authority? It feels like the field is wide open.
At first blush, Minister, it would appear that you have been very busy, but a closer look reveals that whether we're looking at legislation you've introduced, regulations that have been gazetted or the recent measures included in the Budget Implementation Act, much of the heavy lifting has been left to the department or to industry itself.
Take the numerous initiatives undertaken in the air industry. Consistently we have heard that the cumulative effect of these initiatives—regulations on flight duty time, the air passenger bill of rights, the recent creation of a new entity for security screening through the BIA and the tight timelines, for which industry must be ready—is overwhelming the industry's capacity to implement these changes in a safe and seamless manner.
On top of this, the industry is continuing to grapple with the recent grounding of their Boeing 737 Max 8 aircraft and the subsequent changes that have had to be made by the airlines to continue providing safe air service to Canadians.
I want to quote Mr. Bergamini when he was here at committee:
Now, as our industry is grappling with major operational challenges stemming from the grounding of the Max 8, the implementation of new flight duty times rules, and the impossible task of complying by July 1 with prescriptive new passenger rights rules, we are again confronted with a government-imposed deadline and process.
He was referring to the measures in the BIA.
Why, Minister, would you introduce this measure in the Budget Implementation Act at the end of a session, five months before an election, when the industry is already struggling on so many other fronts?
I would like to say that there are a lot of things happening in the airline industry, and we announced our intention to put a lot of these in place, I would say, years ago. In fact, the proper normal government process of consultation and gazetting has been a very long process, and the time has come in certain cases to go to Canada Gazette, part II, and put these regulations into effect.
First, it hardly comes as a surprise to the industry that we have wanted to address the issue of pilot fatigue. It's something that started under the Conservatives back in 2010, and it didn't get done by 2015. We carried on with it and are now putting it in place, so it hardly comes as a surprise.
Second, on the issue of passenger rights, we made it clear three years ago that we were going to come forward with that.
We're also adamant about issues related to accessibility for passengers.
These are all things we clearly indicated we would go forward with. We have consulted with industry, and now the time has come to put the results into effect. We feel that the timelines we are going to announce, and in some cases have already announced, are very reasonable.
Thank you, Madam Chair, and welcome to our committee, Minister Garneau. Thank you for being here today.
Mr. Garneau, I understand that you have just returned from the Great Lakes Economic Forum in Cleveland, Ohio, in your role not only as a minister but as chair of the Cabinet Committee on Canada-U.S. Relations, Trade Diversification and Internal Trade.
The question, and in particular as it relates to today's discussion in respect to the budget, is on how there continue to be investments to strengthen trade corridors domestically here in Canada. Are you continuing to have discussions with our U.S. counterparts to integrate and communicate those domestic trade corridor investments, and also, with that being done and completed, to ensure fluidity and hopefully see that they're also integrating a lot of their trade corridor investments so that movement does flow over the border in a seamless fashion, whether it be by road, by the Great Lakes, by air or by rail?
The reason I ask is that in our neck of the woods in Niagara, we see a lot of trade leaving our region and going into the States. Equally as important, if not more important, is that a lot of that trade is going through or coming from Niagara over the border and then going into, for example, the Port of New York, Staten Island, Manhattan or other ports, and then going international.
Therefore, there's the need to have that fluidity, especially when you're going over the border, whether it is road, rail, water or air. Are those discussions happening?
In short, yes. The Great Lakes Economic Forum, which I attended yesterday, is, as you know, composed of nine American states that border on the Great Lakes, as well as Ontario and Quebec. This is a very useful forum, because we all have a lot of things in common.
As you point out, looming large in those interests that we have in common is how we make the trade corridors as efficient as possible. We're talking about a region that represents $6 trillion of economy and 100 million people. There are an awful lot of products that we want to get to the right place. The St. Lawrence Seaway is an essential element of that, and as you point out, there is rail, but we have under-exploited the maritime routing.
As you know, we in Canada are at the moment evaluating how we can make the St. Lawrence Seaway more efficient. It also, of course, goes through a region that you're very concerned about, the Niagara peninsula and the Welland Canal. We want to get more of the goods that are produced to markets in a quicker fashion. The people I met with from the Port of Cleveland and those nine American states, for example, want to get their products. Yes, they can use rail, but they also feel, as we do, that we can do better with respect to maritime traffic.
It is something that we are talking about and that we share in common.
Thank you for your question.
I recognize that transportation affects the daily lives of Canadians, including the noise it generates. Although airports are the hub of the economy, their activities must take into account the needs of communities.
In terms of the specific problem of airport noise, the government is sensitive to the concerns of residents living near Montreal airport and other airports across the country. We continue to monitor the situation very closely.
Aircraft noise management is complex. It requires the combined efforts of various levels of government and various players in the air transport industry. Various groups are involved.
It's encouraging to see that the industry is paying attention to this issue. For example, NAV CANADA and the Greater Toronto Airport Authority have called on recognized experts and the general public to help them find ways to reduce aircraft noise at Toronto Airport. They have openly committed to implementing most of the recommendations provided by this group of experts. They are preparing reports and consulting on this work.
There are things that can be done, but all players must work together. I am highly aware of this issue because I constantly hear about it.
We try to achieve the right balance here. As you point out, Marine Atlantic service is vital to the interests of Newfoundland and Labrador, and for people who depend on it not only for their personal travel but also for most of the goods that arrive at and leave the island.
Marine Atlantic brings more than a quarter of all visitors to Newfoundland, as well as two-thirds of all freight and 90% of perishables and time-sensitive goods, and we have a constitutional responsibility to maintain the service between North Sydney and Port aux Basques.
Marine Atlantic is seeking $153 million for year-round constitutionally mandated ferry service between North Sydney, Nova Scotia, and Port aux Basques, as well as non-mandated seasonal service between North Sydney and Argentia. Budget 2019, as you know, mentioned that we're going to extend support for existing ferry services in eastern Canada, and we will also be looking to procure three new ferries, one of them for Marine Atlantic. That would be to replace the Leif Ericson.
I realize the service is still expensive. Our approach has been that we subsidize the constitutionally mandated one, and we aim to get 100% recovery on the non-mandated one. We feel we've achieved the right balance, although perhaps not everybody agrees with that. We're trying to do something that provides that service and allows the fleet to be modernized when the time comes, but at the same time we also have to be mindful of the expenditures involved.
Thank you, Madam Chair.
Thank you, Minister, for being here.
I just wanted to follow up a little more on the CATSA transfer.
I'm not here to ask questions on behalf of the airlines, but we had some quite compelling testimony over the last couple of meetings.
I won't repeat everything my colleague mentioned in her initial question, but I think you have to admit, Minister, that while your comments—and I'm going to paraphrase them—were that this consultation has been going on for a long time, really all of the details of the passenger bill of rights were only passed through in this session. These details around the CATSA transfer only really came to light in the BIA. Of course, the airlines have had to deal with something that was not anyone's fault, which was the grounding of the MAX 8s.
I'd like to get a little more of an explanation of why it is so important to get this through as part of the budget implementation act, rather than ensure that it's negotiated fairly and that at the end of the day the consumer is not going to be impacted negatively by this measure.
Minister Garneau, the trade corridors are obviously very important. I think you, your ministry and the whole government have recognized that. This committee has recognized it.
Mr Badawey and I initiated a study of the Niagara trade corridor and the west coast trade corridor. You will be pleased to know that the level of talk about collaboration among the component parts of the west coast trade corridor has gone significantly up. I had the pleasure of attending a WESTAC conference a week ago, and they understand that they've got to do a better job of coordinating their activities and not just leave it to government to sort everything out.
Having said that, I have a request rather than a question. It has to do with that third class 1 railway serving metro Vancouver's ports, the Burlington Northern Santa Fe. That line continues to demonstrate difficulties with safe operation, with reliability. There was a washout just the other week that shut it down for two days, and of course there's the difficulty of capacity, because the rail line currently follows the shoreline through a residential area in White Rock, where there are obviously speed limitations.
The request is one that I'll repeat, because we've made this request before. It's for around $300,000, give or take, to co-fund, with the regional municipalities and the Province of British Columbia, a study to relocate that BNSF line off of the waterfront, opening up obviously better trade movement as well as the possibility of high-speed rail service down the Cascadia corridor.
I'll leave that with you, sir, but if you have a comment to make, please do so.
Thank you to everyone.
Now I have to read out the following: Pursuant to Standing Order 81(4), the committee will now dispose of the main estimates for the fiscal year ending March 31, 2020.
CANADIAN AIR TRANSPORT SECURITY AUTHORITY
Vote 1—Payments to the Authority for operating and capital expenditures..........$586,860,294
Vote 5—Delivering Better Service for Air Travellers..........$288,300,000
(Votes 1 and 5 agreed to on division)
CANADIAN TRANSPORTATION AGENCY
Vote 1—Program expenditures..........$31,499,282
(Vote 1 agreed to on division)
Vote 1—Operating expenditures..........$678,526,078
Vote 5—Capital expenditures..........$134,973,337
Vote 10—Grants and contributions - Efficient Transportation System..........$593,897,864
Vote 15—Grants and contributions - Green and Innovative Transportation System..........$65,026,921
Vote 20—Grants and contributions - Safe and Secure Transportation System..........$17,842,681
Vote 25—Bringing Innovation to Regulations..........$10,079,959
Vote 30—Canada's Marine Safety Response..........$1,128,497
Vote 35—Delivering Better Service for Air Travellers..........$4,800,000
Vote 40—Encouraging Canadians to Use Zero Emission Vehicles..........$70,988,502
Vote 45—Protecting Canada's Critical Infrastructure from Cyber Threats..........$2,147,890
Vote 50—Safe and Secure Road and Rail Transportation..........$73,110,648
(Votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50 agreed to on division)
Vote 1—Payments to the corporation..........$152,904,000
(Vote 1 agreed to on division)
Vote 1—Payments to the corporation..........$731,594,011
(Vote 1 agreed to on division)
The Chair: Shall I report these votes to the House?
Some hon. members: Agreed.
The Chair: Thank you all very much.
Minister Garneau and your officials, it's great seeing you again. We've seen a lot of you in this last three and a half years, so thank you all very much. Have a wonderful day.
We will suspend for a moment, and then when we come back, we will deal with Mr. Aubin's request and Mr. Kmiec's motion.
It's my understanding that we have already decided that, but just as a point, with regard to the particular date Mr. Jeneroux proposed in his motion, it would not have been possible to do that.
The committee has already decided that at a previous meeting, so we're not going to go back and reconsider it. Thank you.
All right, we're on to the Department of Transport. We're now studying the temporary use in Canada, by Canadians, of American-plated vehicles. This is brought to us by Mr. Kmiec, who has been working on it for some time.
The committee was kind enough to give Mr. Kmiec some time to introduce his motion and put it on the table. We were happy to accommodate that.
From the Department of Transport, we have Michael DeJong, Director General, Multimodal Strategies and Program Integration; and Mario Demers, Chief, Importation and Audit Inspection.
From the Department of Finance, we have Carlos Achadinha, Senior Director, Sales Tax Division, Tax Policy Branch; and Scott Winter, Director, Trade and Tariff Policy, International Trade Policy Division, International Trade and Finance.
From the Canada Border Services Agency, we have Andrew Lawrence, Acting Director General, Traveller Program Directorate.
From the Canadian Snowbird Association, we have Evan Rachkovsky, Director of Research and Communication.
As an individual, by video conference from Calgary, Alberta, we have Tim Reed.
Welcome to all of you. We are pleased to have you with us today.
We'll start off with the Department of Transport, please.
Madam Chair, members of the committee, thank you for this opportunity to discuss the temporary use of American-plated vehicles by Canadians.
I'm Mike DeJong with Transport Canada. I would like to take the opportunity to introduce my colleague Mario Demers, who's the Chief of Importation at Transport Canada.
I will briefly describe the current rules that apply to the importation of American-plated vehicles and provide a brief update on measures under way to improve this process.
With respect to the current process, the Motor Vehicle Safety Act allows for vehicles purchased in the U.S. to be imported into Canada if they comply with the Canadian motor vehicle safety standards. These standards set out minimum safety requirements to protect the travelling public, such as lighting and braking requirements and steering controls. The act also allows American-plated vehicles to be imported to Canada if the vehicle complies with the equivalent U.S. standards—the U.S. federal motor vehicle safety standards—and can be updated to comply with Canadian rules.
Both countries' motor vehicle safety standards are very closely aligned, but Transport Canada does have unique requirements in areas with proven safety benefits. For example, the Canadian standards include requirements for daytime running lights, a manual transmission clutch interlock and anti-theft immobilizer equipment.
Transport Canada manages the importation process through the Registrar of Imported Vehicles, or RIV. Under this process, an importer must confirm that their vehicle has no outstanding recalls and submit proof to the RIV before importation. Once in Canada, after paying the RIV fee, the RIV will tell the importer to present their vehicle for a final federal standards inspection. Before the inspection, the importer must make any modifications needed to bring U.S. vehicles into compliance with Canadian requirements.
The RIV is funded through user fees charged to Canadian importers of vehicles brought into the U.S. The fee pays for a series of tasks and services, such as pre-purchase compliance verification, importation documentation, and tracking and final notification to provincial vehicle registration authorities. The RIV also operates seven days a week and operates 500 inspection stations.
In the case of a temporary importation, the current safety regulations provide allowances for vehicles that do not meet Canadian safety standards. For example, these allowances cover circumstances that involve testing vehicles, evaluations or evaluating new safety features. To facilitate tourism and cross-border movement, U.S. citizens are allowed to temporarily import and export U.S. vehicles, including rental vehicles. The same is true for Canadian citizens exporting and importing Canadian licensed vehicles.
Currently, the existing safety regulations do not permit a Canadian citizen to temporarily import a U.S.-registered vehicle into Canada. Rather, the vehicle must be imported on a permanent basis. This is identical to U.S. law, which prevents a U.S. citizen from temporarily importing a Canadian registered vehicle to the U.S.
The federal safety regulations are currently based on an assumption that a Canadian importing a U.S.-registered vehicle is doing so on a permanent basis. Transport Canada recognizes that this is not always the case. As such, the department is working to amend the safety regulations to allow for a temporary importation of U.S. vehicles by a Canadian citizen when it is clear that the vehicle will be returning to the U.S.
These regulatory amendments are under way. As part of these regulatory amendments, there would not be any RIV fees applied to temporary importation of U.S.-plated vehicles into Canada. These proposed amendments were pre-published in the Canada Gazette, part II, on May 19, 2018. Building on this progress, the department is aiming to finalize the amendments and seek final approval, final publication in the Canada Gazette, part 2, by the end of this calendar year 2019. Pending final publication, Canadian citizens would immediately be able to apply to Transport Canada, with no registration fees, for a permit to temporarily import a U.S.-registered vehicle into Canada.
Thank you, Madam Chair.
Thank you, Madam Chair, and members of the committee, for inviting us here today to speak with you.
My name is Scott Winter. I'm the Director of Trade and Tariff Policy at the Department of Finance. I'm joined today by my colleague, Mr. Carlos Achadinha, who is the Senior Director of the Sales Tax Division.
I'd like to begin today by explaining the general policy goals of Canada's tariff regime and the goods and services tax—the GST—followed by a short description of the treatment of imported vehicles, including importations on a temporary basis, and how this treatment fits with those goals.
Customs duties are established under customs tariff legislation, and applied on imported goods, where applicable, for a variety of policy reasons, including domestic industry protection, as well as revenue generation.
The GST is Canada's national sales tax. It is a broad-based tax that applies to most goods and services acquired for consumption in Canada. The GST is generally levied on imported goods in the same manner as it is imposed on domestic purchases, in order that the imported goods do not benefit from a tax-based competitive advantage over goods sold in Canada.
In light of these considerations and principles, Canadian residents who import a vehicle into Canada are required to pay applicable import duties and taxes at the time of importation. There are certain exceptions to the general rule that customs duties and the GST apply to the importation of vehicles, including for those imported on a temporary basis.
For example, customs duties and the GST do not apply to vehicles temporarily imported by Canadian residents for the purpose of transporting their own household or personal effects into or out of Canada, or as a result of an emergency or unforseen contingency.
Subject to conditions specified by regulation, Canadian residents are also able to temporarily import, free of customs duties and GST, a foreign-registered vehicle to reach their destination in Canada and return directly to a point outside of Canada within 30 days. However, the vehicle may not be used for other personal reasons while it is in Canada.
The current framework was designed with the broad policy goals of avoiding competitive disadvantages or inequities for Canadian businesses, for example, vehicle dealers in Canadian border communities, as well as minimizing the risks of duty and tax avoidance that could negatively affect government revenues, and create an uneven playing field for Canadian businesses.
The collection and administration of customs duties and the GST on imported goods, as well as the exceptions for temporarily imported vehicles that I mentioned, fall under the responsibility of Canada Border Services Agency—CBSA. My colleague from the CBSA will outline how the agency currently applies and administers the customs duties and GST on temporary importations of vehicles.
Thank you, once again, for allowing us the opportunity to speak today. We welcome any follow-up questions the committee may have.
Good afternoon, Madam Chair and members of the committee.
As the committee is aware, the agency's mandate is complex and dynamic. In managing the border, we administer and enforce over 90 acts and regulations on behalf of other federal government departments and the provinces and territories.
With respect to this study, on the feasibility of allowing Canadians to bring their legally owned and U.S.-registered and -plated passenger vehicles into Canada for a defined temporary period without having to pay any taxes, duties or importation fees, the CBSA can only speak to its enforcement of the legislation as it applies to the border. The CBSA first derives its authorities to examine, detain and/or refuse entry to any good or conveyance, in this case a vehicle, under the Customs Act, one of the agency's primary pieces of legislation. When a Canadian resident is seeking to return to Canada with their U.S.-plated passenger vehicle and they approach a land border or port of entry, a border service officer must consider a number of acts and regulations before the vehicle may be admitted to the country.
First, vehicles imported into Canada must meet the requirements set by Transport Canada under the Motor Vehicle Safety Act. The CBSA assists Transport Canada by ensuring that these vehicles can be imported, and will prohibit the entry of inadmissible vehicles. Second, with its broad food, plant and animal authorities, the CBSA will inspect motor vehicles entering Canada to ensure that they are clean and free of pests, soil or other organic material. Vehicles found to be contaminated are refused entry and ordered removed from Canada under the authorities of the Plant Protection Act and the Health of Animals Act, as well as their associated regulations. Third, on behalf of Environment and Climate Change Canada, the CBSA may, on ECCC request, detain shipments suspected of non-compliance pursuant to the Canadian Environmental Protection Act, 1999.
Finally, on behalf of the Department of Finance, the CBSA must ensure that residents of Canada operating vehicles for which duties and taxes have not been paid are in compliance with the strict conditions set out in customs tariff item no. 9802 and the regulations respecting temporary importation of conveyances by residents of Canada. Vehicles imported temporarily will be on a duty- and tax-free basis so long as the conditions under the regulations are respected. For those vehicles that are admissible to Canada and that will be imported on a permanent basis, the CBSA must then assess the duty, excise tax and goods and services tax owed to the Crown.
lt should be noted that in situations of emergency or unforeseen circumstances, Canadian residents may be permitted, under these regulations, to temporarily import non-compliant vehicles. Currently, the processing of foreign registered vehicles is paper-based, and the CBSA does not track statistics or data related specifically to the subset of the population the committee is examining.
I hope I have clarified the CBSA's border enforcement role with respect to the temporary importation of vehicles by Canadian residents. I would be happy to take any questions the committee may have.
With regard to the latter, most recently the CSA has been actively tracking the development and implementation of the entry/exit initiative, the information-sharing program between Canada and the United States that is scheduled to become fully operational by the end of this year. The entry/exit initiative is one program in the broader Beyond the Border declaration that was unveiled in February 2011 and aims to enhance the collective security and accelerate the flow of legitimate goods, services and people both at and beyond the Canada-U.S. border.
Another cross-border matter that impacts our membership, and is the current subject of study for this committee, relates to Canadian residents' temporary use of American-plated vehicles while in Canada. Under the current legislative and regulatory framework, Canadian residents are only allowed to bring into Canada a foreign-plated vehicle temporarily for the purposes of transporting household or personal effects into or out of Canada for up to 30 days. In all other circumstances, if you buy, lease, rent or borrow a vehicle while outside of Canada, Transport Canada and Canada Border Services Agency legislation do not allow you to bring a vehicle into Canada for your personal use, even temporarily, unless it meets all Transport Canada requirements and you pay the duty and federal taxes that apply.
In our opinion, the current arrangement is outdated and does not reflect the growing trend in both countries towards making the border experience as seamless and as timely as possible for low-risk travellers. This policy ought to be modernized because, in its current form, it places an unnecessary restriction on the travel options of Canadian travellers who own U.S.-registered vehicles.
Over 60% of our members drive from Canada to their winter destinations annually. Generally, as snowbirds age, they opt to fly back and forth from Canada to the United States rather than tolerate the multi-day drive to their winter residences. In order to have a mode of transportation while they are down south, many of them will purchase a U.S.-plated vehicle. This is permitted in all Sunbelt states, particularly Florida, Arizona, California and Texas, and vehicles can be registered and insured with a Canadian driver's licence.
In certain instances, these Canadian travellers may be required to return to Canada in their U.S.-plated vehicles. Under the current legislation, if they cannot satisfy the existing exemption, these individuals are required to import the vehicle through the RIV program, the registrar of imported vehicles program, and pay the necessary import duties, taxes and program fees. These requirements make sense for vehicle owners who reside in Canada for most of the year, but seem excessive for owners of U.S.-plated vehicles who reside in the United States for up to six months annually and eventually intend to sell the vehicle in the United States.
Once again, I would like to thank the committee members for their invitation.
I'm happy to take any questions that you may have.
Thank you, Madam Chair and committee members, for inviting me to address you.
I'd also like to thank my MP for his attendance and his valiant support for this cause, along with for his interest in the item.
By way of background, like hundreds of thousands of Canadians, my wife and I own a retirement home in the U.S. We also own two vehicles purchased and registered in the State of Arizona. Following the purchase those vehicles, I was surprised to learn that we would not be able to bring them into Canada for a temporary period. The only way under existing legislation, which I understand to be the Motor Vehicle Safety Act, would be to apply to permanently import the vehicle, as you've just heard from several other speakers. It would seem that the Motor Vehicle Safety Act, given its title and its preamble, exists primarily for safety reasons. While laudable and necessary, it seems the act would not apply to a U.S. citizen wishing to bring their vehicle into Canada temporarily. Indeed, we see this by the tens of thousands, I suspect, at border crossings.
While the legislation deals at length with the permanent importation of vehicles, you have to assume that when the legislation was passed it had not been conceived that a Canadian citizen would own a vehicle in the U.S. and wish to bring it temporarily into Canada. This results in the ludicrous situation where a U.S. citizen in this instance enjoys more rights in Canada than a Canadian citizen.
Why should a Canadian citizen wish to bring their vehicle temporarily into Canada? In our own circumstances, one of our vehicles happens to be a convertible sports car, which we would, in the occasional year, like to enjoy for several summer months on the roads in Canada.
Another example that my wife and I encountered was the proposal by Australian friends of ours to join us at our property in the U.S. and take a scenic drive north through the U.S. and through western Canada, from where they would return to Australia from Canada by air, and we would depart back to the U.S. with our van. As it turns out, the only way that was possible was through a costly car rental, and as a result, our proposed road trip was cancelled.
Interestingly, under this legislation, we would have been able to bring a rental car into Canada, but not our own. This begs the question: Why does a U.S.-based rental car company enjoy this right while Canadian citizens do not?
In another instance, my brother-in-law, unaware of these restrictions, intended to trailer his off-road vehicle temporarily into Canada, but was prohibited from crossing with it at the border. He had to leave the vehicle on the U.S. side of the border, drive to his home in Calgary, process paperwork to have it permanently registered in Canada, return to pick up the vehicle, and then return it several months later to leave it permanently back in the U.S.
These are actual occurrences. One can easily imagine other scenarios, too. For instance, should a Canadian citizen with her own U.S.-registered vehicle need to urgently return to Canada but be unable to fly, perhaps due to health reasons, being unable to book or afford an airline flight, or perhaps air traffic being grounded, they are further stymied from.... Let me just say I had understood that they would be further stymied from driving their own vehicle, and now we've just heard that, in cases of emergency, Canadian citizens could bring their vehicles back. I was unaware of that.
For almost five years now I've been investigating and communicating with government officials about this issue. During this time, a Department of Transport employee raised the problem of ensuring that a vehicle brought into Canada temporarily leaves the country. One might ask the same question about a U.S. citizen. Notwithstanding, I had offered a simple and easily implemented process to deal with this issue.
As my time in front of you is limited, and this meeting concerns a legislative problem, not an implementation challenge, I will defer going through this procedure I had suggested. Although, for your reference, you may find my suggestion and copies of letters to dated January and September of 2019.
In 2017 Mr. Kmiec kindly offered to support a petition to Parliament concerning this issue. I was advised that as few as 25 original signatures of Canadian citizens would suffice. When this fact about petitions was explained, not a single person declined to sign. I easily gathered 100 signatures. Many of these individuals own property in the U.S. and many of them own vehicles in the U.S. It is safe to say that most were aghast to learn of the restrictions on their right. Mr. Kmiec subsequently read and entered our petition in Parliament in 2017.
In summary, I'm asking the committee to initiate the process of having this oversight in legislation corrected, thus restoring the rights of Canadian citizens that have been inadvertently eliminated for no apparent reason.
It is gratifying to see officials from various departments of the civil service in attendance. I am a retired corporate executive from the private sector with a long career in administrative functions. As such, I can fully appreciate the importance of the administrative process when it comes to implementing policy, or in this case, legislation. However, as I fully know from my own career, process and administration follow policy, and not vice-versa.
I acknowledge that this issue affects a very small part of our population. However, I ask, what is the calculus for deciding when to disregard a citizen's rights? I trust in your judgment as parliamentarians to do what is right regardless of the number of Canadians affected.
Thank you for your attention, and I can take questions, too.
Again, my thanks to the committee members, and the government side especially, for making this possible. As you've heard from my constituent from the great riding of Calgary Shepard—not the greatest, but a great riding, as I know everybody is going to correct me and say theirs is the greatest—it has taken five years to get to this point where I could get a committee hearing. That's the nice part.
Also to the officials, thank you all for being here. I know we've picked you out of your departments on a weekday to present what is—I admit it, and so did Mr. Reed—a very small niche issue.
Now I'll go into the more negative aspect of it. I have all the correspondence here, that back and forth with the minister's office that Mr. Reed has given me, as well as the petition response that I got, which was very unsatisfactory.
This is what happens when issues such as this are not dealt with immediately, when a resident of Canada raises an issue of private property, raises an issue that is very technical in nature.
Mr. DeJong, you said you are waiting, because at the end of the year there will be changes to the Motor Vehicle Safety Act regulations to allow Canadians to import their American-plated vehicles temporarily, but my understanding is that first they have to seek a permit. They won't just be able to show up at the border. They would apply for a permit ahead of time with the Canadian government. They would fill out the application with the licence plate information.
Could you tell me more about how that will actually function?
Currently, there are allowances for temporary importation. The changes in the regulation that will be put into effect by the end of this year in part II of the Canada Gazette are to expand on that. What's being added is an ability to do exactly what we're discussing today, to temporarily import a U.S.-registered vehicle.
Currently, there's a form online, or you can also get a paper form by reaching out to Transport Canada. You provide basic information, the vehicle information such as the VIN, the make, model and year, the date of importation, how long you think you're going to be here and the purposes for importation, and Transport Canada will then issue you an authorization certificate that you present to CBSA at the time of entry, to demonstrate that you've already cleared it as a temporary importation, not a permanent importation, and therefore, you are not to be sent to the RIV program and have to pay a RIV fee, and so on, and have your vehicle modified.
It just clearly identifies, and when you get to the border with the sheet, CBSA understands that it has been viewed and approved by Transport Canada.
Thank you, folks, for being here today. It's much appreciated. As well, I want to thank you for the work that I'm sure you've done on this file in the past little while.
I also want to thank you, Mr. Kmiec, for bringing this forward. Although it's a niche area and I'm sure it affects only a few individuals throughout the country, whether it's one, a hundred, a thousand or a million, it is important. I thank you for that. I also want to thank you for bringing the motion that was unanimously supported. You weren't here at the last meeting when I brought up my amendment to that—or change of motion. I just want to make it clear that the reason I did that was to try to expedite this for you, to ensure that. Although sometimes we sit on different sides of the table, we are in fact working together in the best interests of individuals like the ones I'm sure you've discussed this issue with for many months.
My question for Mr. Kmiec is going to be very short and simple.
In what you've brought forward now and in the work that's being done, it has been very well articulated by the department that they are working to amend the safety regulations. You've set a time frame for the proposed amendments and, although they were pre-published in the Canada Gazette, part I, on May 19 of 2018, the intent is now, pending final publication, to have this done by year-end. Then, of course, a lot of these issues would be dealt with and put to rest, so to speak.
Mr. Kmiec, are you satisfied with the direction that the department has taken?