FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, June 6, 2000

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[English]

The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'll call the meeting to order and welcome everyone here this morning.

As you know, the finance committee is studying cost recovery. This morning we have the pleasure to have with us, from Treasury Board Secretariat, Mr. Richard Neville, and from the University of Toronto, Dr. Richard Bird, from the faculty of management.

Welcome.

From the Department of Fisheries and Oceans, the Canadian Coast Guard, we have the commissioner, John Adams, and Tim Meisner, director of policy and legislation, marine programs division.

We also have, from the Consumers' Association of Canada, Gail Lacombe, president and chief executive officer, Jennifer Hillard, vice-president, issues and policy, and Jean Jones, chair, national health council.

Also from Treasury Board is Len Endemann, director of cost recovery.

You're all experts in appearances in front of the finance committee, so you know how the finance committee works. We give you approximately five to ten minutes to make your introductory remarks. Thereafter, we proceed to a question-and-answer session.

We'll begin with Treasury Board.

Mr. Neville, welcome again.

Mr. Richard J. Neville (Deputy Comptroller General, Treasury Board Secretariat): Thank you, Mr. Chairman.

The Chair: They like you here.

Mr. Richard Neville: It's always a pleasure to be here. I hope we're here by popular demand the second time.

The Chair: Yes, that's the way to put it.

Mr. Richard Neville: With me is Mr. Len Endemann, my colleague and also the director of the cost-recovery division within the Treasury Board Secretariat.

Mr. Chairman, since our initial appearance before you on May 9, we have been following the proceedings of this committee with great interest. With your permission, I would like to make a few remarks about some of the issues that have been raised.

There appears to be a consensus that cost recovery makes sense where a government program confers a private benefit on a user group or industry, but some have questioned whether it's appropriate to apply cost recovery in the case of mandatory or regulatory services. They would argue that the public should bear the full cost of such programs since their purpose is protection of the general public, not services to the private user.

There are several government programs that spend money to protect the public from risks associated with industrial activity. According to our cost-recovery policy, some part of the costs of these programs should be borne by the industry that originated these risks. Some of these costs belong, according to this argument, to the costs of production of that industry. They are industry costs, if you will, and should be internalized. This is the rationale behind fees in the cases of inspection and testing programs, for example, and is entirely consistent with the government's current cost-recovery policy.

We have also noted with a great deal of interest the discussion that has taken place with respect to service levels. This is a far from simple subject and goes well beyond issues of turnaround times for drug approvals, for example. The industry perception of service is inevitably going to be different from that of a government regulatory program. Industry is interested in a speedy result. The government program is concerned with its public interest objectives, which are often complex and have several dimensions.

Discussions about service standards must occur—they are central to our policy—but they are never going to be simple. There will always be an inherently different concept of acceptable risk between government and the affected industry.

While industry asserts the right to demand improved service levels according to its definition of service, other parties have expressed fear that a user say, user pay approach would co-opt government programs and undermine their public interest foundations.

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There are two sides to this issue, and government program managers must achieve a balance that is responsible to client needs but does not allow this to undermine the policy basis of their programs. This can never be simple.

However, industry representatives have every right to express frustration when agreed upon service levels have not been achieved. This is an area that needs a good deal of attention and will certainly form a key element of our policy review.

Another subject that came up in the committee's deliberations had to do with dispute resolution mechanisms. The term “dispute resolution” in the policy refers to the process that someone can use to seek correction or redress when they have not been properly treated in the application of a fee. Dispute resolution does not mean a mechanism through which the fact of there being fees in the first place can be continuously disputed and challenged.

The decision to set fees or not is a government decision and it is put into place pursuant to legislation. Those who oppose fees in a given area or who would like to see fees revoked altogether should make their views known by addressing ministers, parliamentarians, and senior officials, as the business coalition has been doing very effectively.

However, there should also be a means of seeking redress when a fee has been wrongly or unfairly applied to an individual. In our experience, departments and agencies do have dispute resolution mechanisms of one type or another in place. Performance varies, however, and this is certainly an issue for the policy review. I believe that better and clearer guidelines are required than are currently contained in the policy.

[Translation]

Furthermore, during some of the presentations before this committee, some doubt was thrown on the commitment of the Treasury Board Secretariat to the planned review of the current policy. Let me clarify where we are going.

The current policy sets out a commitment for a review of the policy to be initiated at the three-year mark. We are now refining our methodology for this review, developing terms of reference and methodological approaches. This work is on track.

Our overall approach will be as follows. We will begin with an evaluation of the three-year record of the policy. How good was the policy, and how well did government departments implement it. This is a retrospective exercise that should give us a good set of lessons learned. We will do this by gathering the perspectives of all of those who have worked with the policy or been affected by it.

We have already heard a number of judgments of the past-three- year record from, for example, the Business Coalition on Cost Recovery. Their views are very important and will form a large and important part of our review.

Theirs is not the only voice, however. There are many stakeholders who must have the opportunity to provide their perspective if we are to assess this policy fairly and accurately.

The evaluation should tell us what needs to be fixed. We will build on its findings and develop improvements to our policy framework. This is a separate exercise that follows logically from the first.

We will then consult thoroughly with stakeholders on this set of new proposals. As in the past, these stakeholders would include the groups who have been before you over the last month, and many more. We would also be grateful for the opportunity to present these proposals before this committee, if that would be your wish.

Finally, we would ask the government's approval of an improved policy framework that had already been thoroughly tested by stakeholders.

We see this work as being completed this fiscal year. It will be done in a transparent manner. As terms of reference are developed we will make them freely available, probably on the TBS website. As consultants' reports are completed, these too will be made freely available.

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[English]

Next, I would like to address the business coalition's claims that cost recovery has had a serious impact on the national economy and job loss.

There are only two real sources of funds for the cost of government programs: revenue from general taxation and revenue from cost recovery. Any serious analysis of the macroeconomic impact of cost recovery must also consider the alternative.

We have commissioned such an analysis. A summary of this report, prepared by Informetrica, is contained in a package of supplementary information we are tabling here today. The not surprising result is that funding programs from user fees versus taxation lead to about the same macroeconomic result. In other words, there is no measurable difference in the impact on jobs or GDP between user fees and taxes. This committee has heard assertions that cost recovery costs the economy several thousands of jobs, but this is just not correct.

This is not to minimize the importance of analysing the effects of user-charging in different sectors and on different industries and avoiding fees where they would do harm to that industry's competitiveness. This is very important and is stressed in our cost-recovery policy.

This leads me to the final question: why do we have cost recovery? It is an equitable way of financing programs in some cases and introduces greater discipline in the management of programs through heightened accountability to stakeholders.

Mr. Chairman, we believe that the principles set out in our current cost-recovery policy are generally sound, but we're also convinced that several improvements are needed to ensure that these principles are implemented properly. We are committed to working with stakeholders inside and outside government to improve our performance.

Thank you, Mr. Chairman. I will be pleased to answer any questions you may have.

The Chair: Thank you, Mr. Neville.

Now we'll hear from Dr. Richard Bird from the University of Toronto, faculty of management. Welcome.

Dr. Richard Bird (Faculty of Management, University of Toronto): Thank you.

Unlike the Treasury Board, I haven't had the chance to see any of the previous testimony, so what I'm about to say will likely be somewhat repetitious or perhaps off the point.

As I understand it, your committee has been considering federal policy with respect to cost recovery. Let me begin these remarks perhaps somewhat perversely by disassociating myself—and I would think most economists—from what seem to be two of the cardinal principles of the present policy. They are principles that I think give rise to some of the problems in which we find ourselves.

The first such principle is actually cost recovery. I think the use of this terminology is quite understandable, but to be blunt, cost recovery is simply not what user-charged policy is about. It is about trying to make the best possible use of scarce public resources by deriving as much information as possible from market behaviour when users of public services are faced with the full—this is economic jargon I'll get to in a moment—marginal opportunity costs of providing them with the last unit of service they consume. It sounds like the document I wrote for the Treasury Board about six years ago.

Note that this does not necessarily, or even generally, mean that the full financial cost of providing an average unit of service will be covered. Also note, as the Treasury Board has just said, that this is very much a proposition, not in macroeconomics but in microeconomics.

Of course, user charges will generally produce some revenue for governments, unless perhaps what the government is doing is so totally useless that no one is willing to pay for it.

There's also the problem, which I am sure you have discussed, that for a lot of what government does, people don't have the choice of taking the service or not; it's a mandatory service. Moreover, in many cases it's a mandatory service provided by a government monopoly, so it's all too easy for user charges to become taxes.

Revenue is not the point. The point is rather to make governments accountable for how they use resources by ensuring that direct users value what they get, at least at the economic cost of producing it. So users of government services, in principle, should gain from well-designed charges, in the sense that they get what they pay for. The nation, in general, should also gain by making better use of the resources citizens have transferred to the government.

This leads me to the second point: are these good things likely to happen? They won't unless the revenues from charges are formally linked, through the budgetary process, to the expenditures for which charges are levied.

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In principle, if the revenue collections from charges, plus any predetermined explicit subsidy to cover externalities—which I'll get to in a moment—do not cover expenditures, the expenditures should be reduced. Note that contrary to what's sometimes suggested, if the charges are set correctly, officials would not have any incentive to overcharge for their services.

Again, however, the Achilles heel of this argument is mandatory services, where the temptation of monopoly suppliers, who reap, in the form of increased budgets, the financial rewards of their charging policies, to stick it to their unwilling victims, has to be carefully watched.

I think it needs to emphasized that not only the efficiency argument for charges, but also—and I think this is what some of the discussion has shown—their political acceptability to a considerable extent probably depend upon the extent to which the prices charged actually go to finance the services for which they are charged. For very well-established historical reasons in our budgetary practice, this link is not well-established in Canada; it is not clear.

Apart from these two quite basic problems—the somewhat misconceived nature of the cost-recovery exercise in the first place and the failure to establish the needed budgetary links—there are, of course, many other problems with implementing the present policy, particularly with respect to mandatory monopoly services.

There are also real problems, in many cases, in measuring externalities, i.e., the public benefits of particular government policies that both justify their existence and in principle should govern the extent to which direct users should be charged for providing the services in question.

Part of the problem here is the fog the word “public” seems to induce in the minds of some who talk about these matters. Broadly, despite the partial weakening of this position in recent years, I think to many in Canada the word “public” still seems to convey the notion of something good and in the public interest, while the word “private” often appears to be heard as meaning selfish, or, a little less pejoratively, something of no public interest or concern. Of course, this is not at all what these terms mean in the relevant economic literature that, however imperfectly, underlies the cost-recovery policy.

Having started somewhat negatively, let me now reverse and state my firm positive belief that the appropriate starting point for any discussion of pricing policy or user-charge policy in government has to be that any service provided by a public agency, with respect to which there's an easily identifiable direct beneficiary—could be a group rather than an individual—should be paid for by that beneficiary, unless—and only unless—sound and convincing arguments in favour of a particular degree of explicit public subsidy can be produced. That is, I would reverse the way this issue is being discussed by many.

The presumption should always be that there should be, in the government's terminology, full recovery of—I hope—appropriately defined costs. But the onus for proof of any other position should always be on those who support subsidization or, to put it another way, the use of other people's money to provide services from which they personally benefit.

As you probably know, or may have already heard from what I've said, economists sometimes use jargon just to confuse or hide the obvious. But sometimes they use it precisely to avoid confusion. In the present context, the issue here is really that certain activities of the public sector give rise to what we call technically “externalities”. That's a benefit—or a cost if you will; they'd be equal if we were doing the right amount of it—that cannot be priced, and hence will not be taken adequately into account by private producers. That's why we have governments, in economic terms.

If this externality is sufficiently valued by society as a whole, as expressed through the political system—and you people are the way we do this—then public provision below cost may be warranted. Indeed, we have a real problem here because unless there's some element of positive externality, why is government doing these things anyway?

Almost by definition, with anything government does, we have a problem. You can have clear private benefits, but there are also some public benefits. So you always have this problem of distinguishing the external—or the social, if you will—and the private benefits.

Now you've probably heard all of this before. You've also likely heard that, in principle, what people like me tell you to do is very simple. There are just two things. First, you have to estimate the size of the marginal external benefit to others or to society in general that arises when a service is provided to an additional user. Second, you just set the charge equal to this marginal cost less the external benefit. Unfortunately, what's simple to say is very hard to do.

In fact, it can be extremely difficult to measure external social benefits in any convincing way, and most discussions of this issue with respect to particular services are quickly reduced to little more than assertions about individual preferences and perceptions.

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So the first, and really in many ways most basic, problem is that it's very difficult to measure external benefits.

Indeed, I already said that almost everything government does—I hope—has some vestige of public purpose, that it satisfies some public policy objective to some extent. It should, or they shouldn't be doing it. But this means, given the difficulty of measuring external benefits, that virtually every conceivable user charge in the public sector will give rise to arguments about the relative importance of externalities or publicness with respect to the particular services. And these arguments are not easy to resolve, because there are no hard measurements of most of these externalities. So it is actually a political question.

There's a kernel of truth in the public purpose argument. Government shouldn't be doing things if there isn't a public purpose. But that kernel of truth can all too easily become a shield for those who would prefer not to pay for the benefits they receive. That's the problem. That's probably why you're having these hearings.

Moreover, in many cases, particularly with respect to regulatory policies, these issues, which are already analytically and politically complex, are further obfuscated by the fact that the direct beneficiaries not only have no option to use or not use the service—it is mandatory—but they also have to use the service provided by a public sector monopoly supplier. A non-federal example would be having your driver's licence.

Now any monopoly, public or private, is likely to exploit its economic power to extract the maximum return from its unwilling clients if it can get away with it. So it becomes particularly important to ensure the prices set are reasonable and particularly difficult in many instances to persuade those who must pay them that they are.

Given problems like these, what can you do to implement sound economic pricing in the public sector? There isn't a simple answer. If there were, presumably none of us would be here.

I think the principles are easy and I think they're of universal applicability. But to put them into practice is both difficult and inevitably particularistic and very specific to each service that you're trying to price. I spent most of my life designing tax systems. Designing tax systems is easy. Getting them accepted is hard. Designing user charges is hard, and getting them accepted is hard.

So user charges can be set only through a political and administrative process like the one the government is using. It's thus critical, especially when charges are being introduced for services formerly provided free—as has been the case here in many instances—and particularly for services provided by mandatory public sector monopoly providers, that you have both an adequate process of consultation with affected groups—stakeholders I guess is the jargon we use now—and an explicit and transparent review and dispute resolution process—and I stand with Treasury Board on the interpretation of that—to ensure the prices set are both reasonable and acceptable.

What's absolutely critical to this process, however, is that the interests of the public at large—that is the other people whose money most interested parties are understandably desirous of securing for their own benefit—are heard. In other words, in the end the best we can do to have a rational user-charge policy is to have transparent and full disclosure and discussion—hearings like this.

So to conclude, economists have long delighted in telling you all there's no such thing as a free lunch. I'm here to tell you that not only is this true, but there's no simple and all-purpose way to divide up the cost amongst those at the table. This probably isn't good news if you're looking for simple answers. But that's the way it is, I think.

Thank you.

The Chair: Thank you very much, Dr. Bird.

We'll now hear from the Department of Fisheries and Oceans, the Canadian Coast Guard, Commissioner John Adams.

Commissioner John Adams (Canadian Coast Guard, Department of Fisheries and Oceans): Good morning, Mr. Chair and distinguished committee members.

I am John Adams. I have with me Tim Meisner, who's my right-hand man on marine services fees. I want to thank you for this opportunity to address the standing committee on the coast guard's marine services fees program.

As you are probably aware, the marine services fees program was initiated in response to the government's program review exercise and conforms with the policies of the Treasury Board. In this context, the coast guard developed strategic plans for both expenditure reduction and cost recovery.

First, I would like to briefly address the coast guard's expenditure reductions.

As an organization we have achieved efficiencies, reduced spending, and adjusted levels of service in areas where they do not impede our core mandate to ensure safety of life at sea and to protect our marine environment while allowing sustainable economic use of that resource.

Our overall net expenditures have decreased from $523 million in the 1996-97 fiscal year to $430 million in fiscal year 1998-99—a reduction of approximately 20%—and we remain on that reduction trend.

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One of the coast guard's program review reduction initiatives was to discontinue dredging nationally, except where required by international agreement in the international waters of the Great Lakes. However, because of the numerous port and shipping interests involved, the coast guard remains involved in the overall coordination and management of dredging in the St. Lawrence. An interim dredging fee was implemented to recover the cost from commercial users. An advisory committee has been established with industry to develop a long-term solution by 2002, and we're on track to achieving that, again in conjunction with industry.

The marine services fees program includes the marine navigation services fee and the ice-breaking services fee. These cost-recovery fees are intended to shift a portion of the costs of delivering commercial marine services from the general taxpayer to those who benefit from the service, thereby regulating demand and obviously recovering costs.

The commercial shipping industry has generally accepted the principle that it bears a responsibility to pay a portion of the cost associated with marine services that assist them in carrying out their business. However, as you will appreciate, the industry is very diverse and includes interests from the west to the east coasts. This diversity has generated considerable debate about the details of this cost-recovery program.

Both the coast guard and industry have worked hard to build a mutual understanding of each other's affairs and needs. We've listened to industry's concerns, and the coast guard has developed an open and transparent process to exchange information with industry.

Marine navigation services fees were introduced in June 1996 to recover a portion of the cost of delivering aids to navigation and vessel traffic service to commercial shipping. Ice-breaking fees were deferred that year to give industry time to prepare for the fees introduction, and an economic impact study was carried out by private sector consultants.

The dialogue with industry did not end with the introduction of the navigation services fee. As these discussions continued, the coast guard recognized the need for a new approach. Changes were made to the navigation services fee to address some immediate concerns expressed by industry while this new approach was developed with the users.

The ice-breaking fee was announced but deferred for yet another year to allow for further consultation with industry on outstanding issues concerning the fee structure. As part of developing this new approach, four industry-led subcommittees studied core areas of concern. They produced some very valuable findings in the areas of accounting for costs, fee dispute resolution mechanisms, ice-breaking fee structures, and cost reduction plans.

Independent of these working groups, some industry members formed coalitions representing both regional and national interests. They also produced recommendations to the minister on coast guard governance and structure, regional fee structures, fee predictability, economic impact safeguards, and the further deferral of an ice-breaking fee.

In April 1998 the Minister of Fisheries and Oceans announced several modifications to the marine services fees program. These included the capping of fees for three years to advance the program of reductions and implement efficient and cost-effective levels of service; improved consultation processes; economic safeguards for stakeholders, which included the setting up of an independent fee dispute mechanism; a Treasury Board cumulative economic impact study; a regional approach to fee setting; and finally, the introduction of an ice-breaking fee.

The ice-breaking services fee, following further consultation with industry, was reduced by 50% from proposed levels and introduced on December 21, 1998.

Before providing you with the status of the marine services fees program, there are a couple of points that I would like you to note to put them in perspective.

First the impact study looked at seven marine initiatives that would have a $75 million impact on commercial shipping. The overall impact on commercial ships of these initiatives is less than one-tenth of 1% of the value of commodity shipped. The marine services fee, which currently generates about $33 million, would be even lower.

The second point concerns the relation of the marine services fees to other charges currently paid by commercial ships. Vessels currently pay fees as high as $200,000 for services such as berthing, harbour dues, and pilotage. In relation, the marine services fee would be in the order of $5,000 to $10,000.

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I would now like to provide you with a brief status of where we are with the marine services fees program.

In keeping with the minister's commitments, various continuing consultative mechanisms have been put in place, chief among which is a reconstituted Marine Advisory Board, chaired by me, as the Commissioner of the Coast Guard.

In addition, regional advisory boards provide a regular interface with local stakeholders and interests. The coast guard also communicates changes and/or developments to the marine services fees program to over 2,000 stakeholders through a newsletter.

The Marine Advisory Board, the MAB, established a working group to examine the coast guard's systems and processes for determining the cost of services and the allocation to clients. This group is comprised of commercial shipping representatives from each region, as well as departmental staff. In January of this year, the group tabled their findings and recommendations to the MAB. As a result of this work, an improved level of understanding of the coast guard's cost information has emerged. The group's findings and recommendations are being reviewed and actioned where feasible, and a second MAB working group has been established to oversee this implementation.

Concurrent and now following on the heels of that is our principal occupation, a previous industry/coast guard task force on ice breaking that determined industries' requirements for ice breaking services, and we have made adjustments to deliver that level of service. The coast guard is now also reviewing the level of service standards, again in conjunction with industry, for each of the other programs, in consultation with the clients, to ensure they are appropriate and clearly understood.

The coast guard has implemented a process for stakeholders or client user groups who wish to dispute some aspect of the application of marine services fees to their commercial marine activities. The process involves conducting an internal impact assessment of the applicant's position, relying primarily on information provided by the applicant. Should the application for exemption be refused, the applicant is invited to request of the minister the setting up of an independent fee review panel. To date, no such requests have been received.

Should it be helpful, the Treasury Board can provide you with an update on the status of their study on economic impacts, the overall study.

Thank you.

The Chair: Thank you, Mr. Adams.

We'll now hear from the Consumers' Association of Canada, Gail Lacombe. Welcome.

Ms. Gail Lacombe (President and Chief Executive Officer, Consumers' Association of Canada): Thank you, Mr. Chairman.

The Consumers' Association of Canada is a 52-year-old independent, not-for-profit, volunteer-based organization with a national office in Ottawa and provincial-territorial branches. Our mandate is to inform and educate consumers on marketplace issues, to advocate for consumers with government and industry, and to work with government and industry to solve marketplace problems in beneficial ways.

[Translation]

The Consumers' Association of Canada was created in 1947. It is an independent not-for-profit organization that depends to a large extent on the contribution of numerous volunteers throughout the country to operate. Its mandate is to inform and educate Canadian consumers on marketplace issues, to advocate for consumers with government and industry, and work with government and industry to solve marketplace problems in beneficial ways.

The CAC focusses its work in the areas of food, health, trade, standards, financial, communications and industry services, and also deals with other marketplace issues as they emerge.

[English]

Our presentation will consist of two parts. Our vice-president of policy and issues, Jenny Hillard, will begin with our general comments on cost recovery and our particular experiences with its application in the area relating to environmental legislation. Then the chair of our national health council, Jean Jones, will comment on the application of cost recovery in the area of legislation designed to protect the health of Canadians.

Jenny.

Ms. Jennifer Hillard (Vice-President, Issues and Policy, Consumers' Association of Canada): We will first attempt to address, from a consumer perspective, the six elements identified in the notification for this round table meeting and will then comment on specific applications from the experiences of our active volunteers.

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Cost recovery was introduced and promoted, along with government downsizing and efforts to become more efficient, as Canada struggled with problems of a mounting deficit and changing demographics that will reduce the proportion of taxpaying Canadians to those who are largely tax dependent.

The Consumers' Association of Canada did not oppose the concept as our constituency, the average Canadian consumer, was expressing concern about the national debt.

At about the same time, the federal government made a commitment to sustainable development and recognized that industry could no longer regard the environment as a free good. Cost recovery was a feature of integration of environmental, health, and social costs into the cost of doing business in Canada. It was generally applied to the work related to the approval of products and services to be distributed in Canada that could negatively impact Canadian society or the health and environment of Canadians.

Whether those measures went too far or not far enough, whether they increased efficiency or put health and the environment at risk by putting them up for sale has been a constant debate. Positions taken depend very much on one's position in society. While business is generally supportive of efficiency and downsizing, they do not support cost recovery, as these costs are usually levied against them. Civil society, while generally supporting the concept that business and industry should pay a fee for the privilege of operating in Canada, distrust information paid for by industry and have concerns that paying the government allows them to influence the regulators.

Industry often raises the issue that if they are charged fees for services they receive from government, similar charges should be recovered from consumers for the services they receive from the public purse. CAC would not generally support cost recovery that involved the levying of fees for service against Canadian consumers.

It is hard to assess whether governments' objectives have been met by the cost-recovery policy. Cost recovery was only part of the efficiency process. Downsizing and implementation of quality management objectives within government were also part of the attempt to improve efficiency. The combination of these should have produced better and more cost-effective government services for all Canadians, and there are limitations to how well any of these pieces of the program can be assessed alone.

CAC has looked at the Auditor General's recent report on the implementation of the quality initiative within the federal government and the results are somewhat disappointing. If service quality is not effectively implemented, there is a danger that the effectiveness of the regulatory process will deteriorate and standards may be lowered in order to meet the demands of those paying costs. Lack of quality management makes it difficult for regulators to be both efficient and effective, especially given the downsizing initiative.

CAC believes it is critical that the impact of the downsizing policy should be assessed at the same time as cost recovery and the implementation of quality management are examined.

CAC believes there is an inherent danger in linking the provision of regulatory examination and oversight too closely to the costs of the service and the portion of these costs that is recovered from those being regulated. We believe the greatest risk in trying to equate the prices charged with the actual cost of delivering the service is that it may expose regulators to excessive pressures from those being regulated. A portion of regulatory cost should remain with the taxpayer. Taxes should provide the portion of the service costs that ensures Canadians of regulatory protection. We believe any cost recovery to industry will be passed on to the consumer in the cost of goods and service. While CAC supports the user-pay principle in some cases, there are some services that we believe should be paid for by taxation.

CAC believes the transparency and accountability of any cost-recovery system is critical to its acceptability to all stakeholders. Business must recognize that the costs they pay are only a portion of the real costs; the rest is still borne by taxpayers. This must be clearly communicated to ensure that regulators are not pressured by those being regulated. It must be clear that they are not just service providers for the regulated. Their prime responsibility is to ensure that Canadians are protected by regulations. Consumers must have access to the information on cost recovery to ensure that passed-through costs are not excessive and that the regulators continue to put consumers' health and environmental protection first.

CAC volunteers, who serve on committees with representatives of the industries that are subject to regulations where cost-recovery is practised, continually hear about the negative impacts of cost recovery on Canadian competitiveness. If cost recovery is eliminated, the revenue will have to come from elsewhere, and we hear the same arguments from the same people about Canadian business taxes.

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Where would this lost revenue then come from? CAC would not support the shift of all regulatory costs of doing business onto the taxpayer. Cost recovery and the pass-through into the price of goods and services effectively creates a reasonable level of user pay.

The negative public view of cost recovery probably relates largely to the failure of the regulators to adequately communicate. Many Canadians were convinced that until recently government did all the testing and research to ensure that products and materials in the Canadian marketplace are safe. Few people were aware that most regulatory approvals were actually granted by having regulators review data provided by an applicant seeking regulator approval to produce or operate in Canada.

They believe it is a new development for industry to do their own testing and submit it to government. This belief, coupled with their distrust of industry data, is creating an erosion of confidence in the Canadian regulatory system. With the publicity given to the closing of government laboratories and to the shortage of scientists on the government payroll, many people now believe that regulators have sold out to those being regulated.

Dealing specifically with areas of environmental regulation where CAC has involvement, we have a volunteer who is a member of the Minister of Health's pest management advisory committee, a multi-stakeholder advisory committee that deals with all issues related to the Pest Control Products Act and the Pest Management Regulatory Agency. Our concern, which develops from the use of cost recovery, is that those on the committee with an economic stake get a second kick at the cat. In addition to being on the multi-stakeholder committee, they also sit on an economic advisory committee where they can advise the minister on such issues as cost recovery without contrary positions from other stakeholders.

It's worth noting that Canada has done thorough studies of how we compare with other countries for cost recovery, service delivery times, and efficiency for pesticide registrations and drug approvals. We have done nothing to compare Canada with other developed countries with regard to how our regulatory system provides protection of human health and the environment.

CAC is also represented in other multi-stakeholder processes that relate to environmental regulation. We find that industry frequently demands fast and rigid turnaround time on approvals in return for cost recovery, which they see as a fee for service. They believe that cost recovery gives them the right to demand a certain level of service. This changes the whole regulator-regulated relationship to one of client and service provider, which is not acceptable. In order to maintain the credibility of the regulatory process, it is important that all stakeholders recognize that cost recovery is not a fee for service and that operating in Canada is a privilege, not a right.

Comments related to CAC experiences of volunteers working on health-related issues will be given by Jean Jones, chair of the National Health Council.

Ms. Jean Jones (Chair, National Health Council, Consumers' Association of Canada): My comments will address the last three elements identified in this study as they relate to the therapeutic products program at Health Canada.

CAC is encouraged to see that this study will consider the propriety of charging for public services that relate to measures required under legislation. This fundamental question was omitted from the mandate of the phase 4 review of cost recovery in the therapeutic products program, which is near completion.

In many fora over the past two years, consumers have expressed their serious concerns at the heavy dependence on cost recovery for funding of the drug review process. They believe this dependence is impacting the primary objective of the drug review process, which is to protect the health of the public, by focusing on service to the client. Senior bureaucrats now refer to industry as their clients, reinforcing the impression that they are focusing more on serving industry than on protecting consumers.

Efforts to accelerate the drug approval process and the concurrent new emphasis on risk management have been perceived as responses to industry pressures. CAC is concerned that this may have resulted in reduced stringency in assessments, and we believe it has contributed to the consumer concern that government has reduced both commitment and capacity to protect the health of the public.

Extensive public debate on the impact of cost recovery upon all stakeholders is needed.

Thank you. We welcome your questions.

The Chair: Thank you. Now we'll proceed to the question-and-answer session. We'll begin with Mr. Harris. It will be a ten-minute round.

• 1155

Mr. Richard M. Harris (Prince George—Bulkley Valley, Canadian Alliance): I thought maybe I would get the whole opposition time, considering they're not here.

The Chair: You are the opposition.

Mr. Richard Harris: Thank you.

Thank you guests, presenters. I appreciate your comments.

I think it can be generally agreed, no matter what kind of fancy language we use to describe cost recovery and fees, that at the end of the day, there's only one person who pays the bill, and that's the Canadian taxpayer, the Canadian consumer of those services. I don't think there are too many businesses in this country that simply swallow the fee and conveniently forget to pass it on to their customers.

I think we can probably agree that user fees or regulatory fees are simply another word for taxes, particularly if the Canadian public is not seeing any type of reduction in the current taxes they're paying. In other words, if the taxes remain constant and user fees go up, I think most people would agree that can be considered simply another tax.

I have a problem with the fact that the government and government agencies, crown corporations, or those private firms that the government has entered into privatization with, such as NAV CANADA, appear to have the ability to arbitrarily impose a fee in order to increase their revenue or make their department appear more fiscally responsible. But the Canadian public ends up paying for it.

With NAV CANADA, for example, when they took over, all of a sudden we saw a NAV CANADA surcharge on the purchase of an airline ticket that I don't believe was there before. This is on top of airport tax and airport improvement fees. Now there's the NAV CANADA surcharge, and I'm sure this was part of the deal they made with the government when they were going to take over the operations that the Department of Transport formerly had. So the Canadian public is paying again, with no decrease in personal taxes.

I'm very much afraid that a current program that has gone completely astray is the gun control registration program, which at last count was $200 million over budget and many months behind. There's only one place they're going to recover that money, and that's probably going to be from fees that are imposed on law-abiding firearm owners in this country.

Where you have a monopoly, of course the only redress the Canadian public has is at election time. We hope they always pay attention to that, but that's not necessarily the case.

I think it was Ms. Jones who touched on the drug approval process. It's been a lengthy process. I think it should be understood that a lengthy process of scrutiny does not necessarily mean it's a good thing. It can often be a result of inefficiency or mismanagement or general bureaucracy holdup. This all results in a bigger and bigger bill to pay. Of course, someone has to pay it. Guess who ends up paying it at the end of day? It's the Canadian consumer.

If Joe or Jane Public out there wants to say, “Enough is enough. How about some accountability?”, how do they get accountability from government for fees that seem to arbitrarily come out of nowhere? They have no option but simply to go along and pay them, and they don't necessarily see any better service. Can anyone answer that? Where's the real accountability factor to the public?

Mr. Richard Neville: Mr. Chairman, maybe I'll start off.

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The accountability lies with the minister responsible for the department that is charging that particular fee. It's quite clearly understood in the mandate that when a fee is determined, whether it's being legislated or whether it's being determined by a specific department, the first line of accountability would be with that department.

There are a number of other accountabilities that would come into play. Obviously the Treasury Board has some responsibilities with respect to the policy. Parliament has overall responsibility and accountability to Canadians. But first and foremost, it's the department concerned, which has taken the decision and has received the necessary authority to put in play the cost-recovery processes and procedures and fees, that is accountable. Within that department, obviously there is a cascading of responsibilities down to the front-line manager, who would probably be the first individual a Canadian would be talking to with respect to that particular issue.

In my opinion, there is a clear set of accountabilities. The question is now whether that is well understood by Canadians across the country. On the question of how we've communicated our programs and how we've communicated the ways in which we can ensure that those programs are well understood and if there are any redress mechanisms, whether that has clearly been enunciated, is a point for debate. I'm still of the view that the programs, as they have been developed and as they've been approved, fall within the parameters of the department concerned.

Mr. Richard Harris: I still think the average Canadian taxpayer is far removed from the minister responsible for that department. I guess it's the consumer groups, such as we have here today, that can advocate on their behalf. Unfortunately, there's always an imbalance in the resources between what the consumer group has and what the government has in order for a consumer group like this to speak on behalf of Canadian consumers.

That's the problem. The government has so many resources to simply have their way with the Canadian people, and advocacy groups that are trying to bring the case forward to the government simply don't have those resources. If we have a government in power that is determined to follow its own agenda no matter what, it makes matters even worse.

I know this problem has been around for years and years, but it would seem to me that if the government were seriously interested in listening to Canadian consumers, for example, or the Canadian taxpayer, they would welcome a stronger voice from these groups and support them by giving them a few more resources to work with.

Mr. Richard Neville: I thought I had made it clear in my opening comments that we're in the midst of carrying out our cost-recovery policy review. It's been a three-year period since we've done that. We are very open and receptive to comments and suggestions. This is the time to make those points known.

We are very much in the context of trying to look at what the problems have been over the last three years. It's only through fora such as this one here that we're in the midst of determining the impact of the policy and suggested changes. So we welcome this kind of forum and we appreciate the comments we've received. This is not the only forum obviously; it's the main one, but there are others. We take all comments into consideration when we finalize our policy. We welcome that.

Ms. Jean Jones: Mr. Chairman, I'd draw your attention to the point we make in our presentation, that there is a lack of any study assessing the impact on protection of the health of the public with the imposition of the user fees. We're very interested in such a study to see whether there have been improvements in the protection. It's possible. The general feeling is that there has been an erosion of public protection. I think that would be, as I mentioned, a very valuable component of your review if such a study were undertaken.

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Mr. Richard Harris: I have one final question. It's my opinion that any fee that's introduced in our country should have for the benefit of the Canadian public a very clear and understandable test result. That test result should be something like this. What will be the impact of this fee on the Canadian public and on the economy? That would be the first test. Number two, is this fee a result of inefficiencies or mismanagement in any department? Can it clearly be shown that this department has operated as efficiently as it possibly can? Number three, can this fee, which is specific to a particular department, be offset by any type of tax reduction as far as individual taxpayers are concerned?

If a regulation or a fee of any kind cannot satisfy some very basic criteria, then it can only be considered to be an additional tax. Is this the type of test the government puts these proposed fees through, or are they simply arbitrarily imposed because a department says they need more money?

Mr. Richard Neville: Mr. Chairman, perhaps I could respond. I'm not sure how much time we have. I think the best way to respond to that would be to say that when a department determines there's going to be a new program with a cost-recovery component to it, there is a policy, which has been clearly enunciated and approved, that lays out what has to take place. One of the components is that consultation has to be well thought through and implemented whereby the stakeholders who are most involved and the departments sit down and discuss what is being put on the table and try to meet each other's requirements. We have examples, whether it be in the coast guard or in other departments, where that has in fact taken place. I can assure you that a lot of discussion, both formal and informal and behind closed doors, in the context of trying to find each other's concerns and to resolve them has taken place. So I think it would be unfair to think that departments just impose fees without having taken the proper steps. As I said, there's a policy that has to be followed. We expect that is in fact done.

Mr. Richard Harris: I appreciate that.

Let's just go back to NAV CANADA for a moment, which took over the operation of most of the air traffic in Canada. I imagine there came a point in the discussion with the government where NAV CANADA said, “The fact is that we simply cannot do this at what you're suggesting. We have to charge an extra fee. We can't do the deal unless we have the right to impose a fee.”

Now, when that NAV CANADA surcharge became a reality, there were, of course, transport committee meetings and finance committee meetings that discussed it, but I do not recall that there was a lot of public awareness about this fee. As a matter of fact, my office and those of many of my colleagues were just inundated with phone calls saying, “What's this surcharge that just arbitrarily appears on our ticket?” We checked into it, and lo and behold, NAV CANADA has every right to impose that fee. As a matter of fact, I believe that under the arrangement they can pretty much set any fee they want.

• 1210

To me it's sort of like taxation by stealth. It's not really a tax, but it is a tax. Because of the way it's done, it's a surcharge, not a tax. Nevertheless, it was obviously negotiated during the deal that they could put this tax on. But there was not a lot of public awareness because advocacy groups simply do not have the resources to make the public aware of this type of thing.

Of course, everyone in the opposition is going to be talking about them before the next election, but we have four- and five-year periods between elections. A lot of money goes out of the taxpayers' pockets between elections.

The Chair: I just want to be clear. Are you advocating that we fund groups such as consumer associations from the public purse?

Mr. Richard Harris: What I'm saying is—

The Chair: You said that they lack the resources. Are you advocating—

Mr. Richard Harris: I'm saying let's make it a little fairer. The government collects all the taxes, and they use all of those resources to justify their position of imposing fees. The government funds all kinds of groups in this country, but the ones they conveniently forget about are the Canadian taxpayers and consumer groups that represent average Canadian people.

Maybe the government should say, because we have all the money, maybe we appear to be the big bullies here, so for the sake of the Canadian public, who we're supposed to represent, let's sort of level the playing field and allow the consumer groups and the taxpayer groups to have just a little bit stronger voice when they're dealing with us and representing the people. That's all I'm saying.

The Chair: Ms. Hillard.

Ms. Jennifer Hillard: Obviously, we're not going to argue with that. We're a volunteer group, so our resources are very minimal. We're all here on our own time.

But what I particularly want to pick up on is something Mr. Neville said in his last response to Mr. Harris, which is that they consult with the stakeholders that are most involved. That's where you have a big gap in this process, because the stakeholders who are most involved are seen to be the ones with the financial stake. Those who have a social stake, such as civil society, consumer groups, medical groups, and environmental groups, are frequently forgotten in that process of consultation. That's not so much the case in this one, obviously, or we wouldn't be here, but in the more intense ones. There will be the two levels: as with pesticides, there will be the big committee where we all get to talk and then the little one where only the people with the economic stake get to go and advise the minister.

That's a disadvantage for civil society, but I think it's also a disadvantage for the regulators, because it gives to the public a bad impression of the way they operate with the people who have a financial stake. We believe that's really one of the things that's undermining confidence in the Canadian regulatory system at the moment.

So from the position of the government, as well as from our own position, I think there's a need to open up that process, to be more transparent, and to guarantee that when you're talking about the stakeholders that are most involved, you'll remember that the representatives of the Canadian public, be they consumer groups, taxpayers, or environmental groups, depending on what the debate is at that point, have to be at that table as well. That's critical.

Mr. Richard Harris: Perhaps I could just make it more clear, Mr. Chairman. On the whole scale of public interest groups or special interest groups that the government funds in this country, you have advocacy groups that represent the Canadian public as a whole, that cross every possible sector of the Canadian public, and that represent everybody no matter what their opinion or belief. But everyone in this country spends money on consumer goods. Therefore, I would suggest that a group such as the Canadian Consumers' Association should rank very high on the list of the so-called special interest groups the government funds because they represent everybody who spends money in the country.

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I think the government funds some pretty wacky special interest groups. I think even you'll admit that, Mr. Chairman. I certainly wouldn't consider this group in that category.

Ms. Jennifer Hillard: We are also not funded.

The Chair: Mr. Harris, the only reason why I asked that question is because my recollection is one thing—without getting too political here, because this is an apolitical group, as you know—and I'm wondering if your views on public investment of the government in organizations like the Consumers' Association of Canada have changed. Is that a departure from your own party's position?

Mr. Richard Harris: No, it isn't. What we've always said is that the Canadian public, the taxpayer, should rank highest on the priority of government and a group like this, which represents all the Canadian taxpayers, every one of them, that crosses the whole sector of different interests, should rank high on the priority list of government funding.

The Chair: So basically you don't mind funding associations, this particular association anyway. That's all I wanted to say.

Mr. Richard Harris: If they're broad based and represent the Canadian public, certainly not.

The Chair: Okay.

Ms. Jennifer Hillard: I have a donation book for you; we'll give it to you on the way out.

Mr. Richard Harris: Give it to Mr. Cullen.

Mr. Richard Neville: If I could pick up on Jennifer Hillard's comment, we should be aware that when we were doing the consultations back in 1997, we certainly had a number of groups who were not directly affected, stakeholders who were not directly affected, as part of the consultation process. We still intend to go down that same road, so I want to reassure you that not only do we take into consideration the stakeholders who are directly affected, but we want to take into consideration the stakeholders who have other interests at heart, whether it be for health, whether it be for environment, or whether it be for other reasons. I just wanted to pick up on that point.

Going back to NAV CAN, though, I think you raised an interesting observation. Maybe I could clarify a few points.

NAV CAN did pay the federal government $1.5 billion for future benefits, and that was passed by legislation, fully transparent in the eyes of Canadians. What NAV CAN does today is outside of our policy since they are a private sector corporation. So we don't have any jurisdiction to the full extent that obviously we had previously.

I think it's fair to say that one has to look at the organization that one is interested in and see where it applies. We do not have any jurisdiction over NAV CAN today from our perspective in terms of the cost-recovery policy.

Mr. Richard Harris: I realize that.

Mr. Richard Neville: Thank you.

The Chair: Thank you, Mr. Harris.

Mr. Pillitteri, followed Ms. Leung and then Ms. Guarnieri.

Mr. Gary Pillitteri (Niagara Falls, Lib.): Thank you very much, Mr. Chairman.

When Mr. Harris started his questioning, I was wondering if they were going to the polls. Mr. Harris, they don't go to the polls. They're always there. We go to the polls. The Canadian people, when it comes to time to elect, will be looking at us, not them. They're the bureaucrats. They stay there all the time, regardless. We, the politicians, come and go.

Mr. Chairman, I wanted to get that clear, just for the record.

They were remarkable presentations this morning, and I have two groups I want to question, Mr. Chairman.

They were talking about industry as stakeholders and specifically touched on pest management. That happens to be very dear to me, because, you see, I'm also a businessman. I produce fruit products in the horticultural industry, and let me tell you that since free trade came in specifically there was an understanding that we should harmonize the products used between Canada and the United States and other countries. Let me tell you, this has not happened, because in order to register a product in the United States, when industry goes before the board and registers a product to use, it takes anywhere between a year and a half to two years, whereas in Canada we're still at about five years.

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What happens is the industry, before they present a product for pest management and see if it's approved, given the five years that we'll have to take a look at it, since Canada is a small marketplace...sometimes they don't present these products because it would be too costly for them to make it available on a smaller scale, because Canada is a relatively small market compared to that of the United States. Before they register a product, they don't accept any of the findings in the United States or other countries; we go through the whole process. Therefore, it puts the Canadian agricultural sector many times at a disadvantage compared to Americans or others.

Let me also say that what happens is those products do come into Canada; the fruit and vegetables do come into Canada with products that are not approved in Canada but are used in the United States, and we consume them. We consume them for two or three years, and yet they're not available to us at a cheaper cost because there's no product. It stays there for an eternity, because there are some fungicides and some insecticides, which have a breakdown point, that would only last sometimes two, three or five years. Then we have to constantly pay for it. It puts the whole agricultural industry at a disadvantage with Americans and now specifically with Mexico. Those products come in very freely to Canada, because those products are used. When they submit a product, if that product has to have 100 uses and it fails one test, that product is not registered here in Canada.

Having said that, I think sometimes we should also consult the stakeholders, those who produce the fruit or produce the product here in Canada, to see what they have to say.

On another point, what are these pesticides that really harm the people? They are mostly not fungicides, not insecticides, but herbicides. Roundup is Roundup no matter where it is. The fact is that we go through the whole process...and there is a tendency among consumer advocacy groups to bunch everything together. I think if you want to do some good work in also representing the people, you should start separating one by one by one what is acceptable in Canada. If a product is used outside of Canada, maybe that's what you should be looking at. If it's banned, then of course we'd be more readily available...and the cost factor would go down.

I tell you, I assure you, as a producer, many times I have crossed over into the United States, buying a product that makes me a criminal, buying a product and using it over here...because the product is coming in sprayed on the material we consume here in Canada.

That's one part, and I know you'd like to answer that. The second question is on cost recovery, specifically in terms of navigation.

Mr. Adams, you did make a remark that you were spending $523 million in navigation and now you have reduced the cost to $430 million from the 1998-99 season. Yet we had groups here last week who were responsible for the seaway saying the cost factor has run away. Also, you did make a remark that the reason it went down is because you eliminated the dredging; you're no longer doing the dredging when it's necessary. How much of that cost was it, so it really doesn't show up? If you take away the dredging part...did the cost of it really go down?

Another thing is you're saying you do everything possible to keep that cost down, and yet the operator said that for buoys that could be $1,500, they charge some $15,000 for a buoy in marking.... These are things that are happening along the St. Lawrence Seaway. They're complaining about the cost. Yet you say you've reduced the cost the most you can.

I'd like to have both groups answer that question.

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Ms. Jennifer Hillard: I don't wish to get into a lengthy debate on the Pest Control Products Act, but there are some points to which I really feel we have to respond.

We've been asking for a new Pest Control Products Act for more than 10 years. There was a whole review of the process, and we're still waiting for the changes we want. One of the reasons we're not getting the changes is because the chemical industry has a lot of the changes they want through regulation, and the changes that other people want require some legislative change. For some reason, Mr. Rock doesn't seem prepared to move with this at this time.

In the regulatory review, the Consumers' Association made some serious enemies, I can tell you, with some of the other public interest groups, in that we avidly supported the use of American data, the world data package, where it was relevant, and only have the necessary add-on Canadian tests that deal with water safety, efficacy, and our particular environmental tests. We supported the farmers wholeheartedly, in particular the horticultural industry, in the application of minor-use products that could be done without going through the whole formal process and user-requested applications, which again particularly referred to the horticultural sector.

I do believe we have in Canada now an agreement with the U.S. to share data on the re-evaluation of older products.

So I think you've sort of thrown us into a basket with a lot of other groups where I honestly don't think we belong.

I'll leave you my card if you would like to phone me and debate the Pest Control Products Act some other time.

But the cost-recovery issue still stands there. To the public, the industry seems to have a special ear both to the minister and the regulators. This is not good for the public perception of the Canadian regulatory system.

Mr. Gary Pillitteri: To respond to that, I did not throw you in there, because I've been thrown in with that five-year process where I cannot get the product.

I just want to make sure. Maybe we're both singing from the same hymn book, so we could tell the minister to accept that research has been done from outside, which they are still not accepting.

Ms. Jennifer Hillard: Especially if he gives us a new act.

The Chair: It's nothing personal. That's what he said.

Mr. Adams.

Commr John Adams: Let me address a couple of points that were made.

The $423 million that we spent in 1998-99 was for all aspects of the coast guard, not just marine services, those activities related to marine services fees. It includes search and rescue and the whole bit, and that is not part of the fees.

But with respect to cost reductions, on the dredging portion, you're absolutely right; that came off our bottom line, and we did pass that on to the commercial sector. But you're talking between $3 million and $4 million. We're not talking phenomenal amounts of money. But that's what it is in the St. Lawrence.

On the cost reduction initiatives we've been engaged in, for example, we reduced our marine control and traffic services centres from 43 centres across the country to 22. We reduced our personnel resources by about 1,400 people. We reduced our fleet from 189, when we amalgamated to three fleets, down now to 106. We have gone on and on. All those things have added up to somewhere between a 20% and 30% reduction in cost.

We've also initiated an aids modernization program. The industry that was before you last week referred to some specific aids, perhaps in the river or in the lakes; I'm not exactly sure. That aids modernization program has saved about $23 million.

We aren't finished. We continue to try to come up with more effective ways of providing aids in the water that will be more cost effective. But regarding our large aids, you're absolutely right; they're extremely expensive. But they have to be extremely capable, because of our weather patterns and the ice, and so on. We will continue to work with industry to reduce those costs.

The Chair: Thank you, Mr. Pillitteri.

Ms. Leung.

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Thank you, Chair, and thank you all for your fine presentations.

I have some questions on the user fees. One common view of the user fees is that it's treated actually as a tax in another name. I appreciate, as Professor Bird pointed out, the difficulty of constructing user fees. However, I like to use the example of the landing fee for the new immigrants, each one at a cost of $975, and as well the visa fee.

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As MPs we have heard a lot of complaints in different ways. For the visa fee specifically from Asia, it's quite high. For the landing fee, you have to consider that those people are new Canadians, new immigrants, and sometimes they have a lack of financial resources.

I'd like to ask this of the Treasury Board. How did you determine how to construct those fees?

I welcome Ms. Jones's suggestion. We should have a study to say how we justify this. We should not just find a number, like not quite $1,000 for the landing fee. Where do you get it and how do you justify it? I think that's important and I'd like to know that.

Mr. Richard Neville: With respect to the landing fee, this was part of the budget bill that was voted by Parliament, so it has again been very transparent in terms of its creation and how it's evolved.

For visa fees, passport, consular fees, services, etc., that's been there for quite some time. I believe Ms. Jennifer Hillard mentioned that cost recovery came about as a result of program review reductions. Unfortunately, that isn't correct. We've had cost-recovery applications for many years, whether it be with Parks Canada, whether it be with visas, whether it be with health, research and development, or whatever.

All I have to say is that with respect to visa fees, that has evolved over time. We have a revolving fund where we determine the cost associated with the service and we apportion that cost to the individuals who are seeking a visa or a passport. So it's really a reflection of the value of the service in terms of monetary cost vis-à-vis the outputs, which is the number of visas we have. We try to match the two together.

Ms. Sophia Leung: Did you do any studies to get to this point?

Mr. Richard Neville: It's ironic that you should raise that. As late as last week, I was before the Treasury Board ministers with a proposal that dealt specifically with revolving funds, and one of them was for the passport revolving fund.

So yes, there are reviews that are ongoing, reviews that involve both the Treasury Board and the department concerned to try to ensure that the policy is in fact followed. It's not just the cost-recovery policy that comes into play; there are other policies. As an example, if we have a policy dealing with revenue respending authorities, that also would be taken into account in determining the final fees.

Ms. Sophia Leung: If we do hear a lot of complaints or opposition based on rational reasons, who should we address?

Mr. Richard Neville: Again, the first line of communication or redress should be with the individual with whom one is transacting that particular piece of business. If that is problematic, one could go to that individual's supervisor and eventually it would find its way to the office of the deputy minister or the assistant deputy minister, and then eventually to the minister.

We'd like to think that ministers are accountable for the programs they may be assigned by the Prime Minister. In that sense, that's where the first line of accountability would be in terms of the various levels within the department concerned.

There is in the policy a provision that if a stakeholder is not satisfied with the results, the President of the Treasury Board would act in terms of listening and trying to determine a fair, reasonable approach to resolve the issue. Obviously we try to avoid those kinds of scenarios as much as possible. We leave the departments to work it through. But as has been the case with respect to the coast guard, we have worked together with the stakeholder to try to resolve the issue. So sometimes we do get involved at that level.

Ms. Sophia Leung: Thank you.

The Chair: Thank you, Ms. Leung.

Ms. Guarnieri.

Ms. Albina Guarnieri (Mississauga East, Lib.): Thank you, Mr. Chair.

One rather cynical businessman once described to me in very vivid terms the difference between government and the private sector, and it went something like this. When you buy an apple in the marketplace, you pay $1 for the apple and you get an apple. When government is providing the apples, government hands you the apple and then you pay for it for the rest of your life through higher taxes.

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In terms of non-essential government services—I think Mr. Harris had a more colourful term for non-essential government services—how can it be argued that consumers generally could benefit from paying indirectly through taxes rather than paying directly for the services they actually use? I open this for anyone.

Mr. Len Endemann (Director, Cost Recovery, Treasury Board Secretariat): I think Professor Bird actually addressed this fundamental question. It was very much a part of what he said.

There is a difference between funding government programs through general taxation and funding them through user fees, and it can affect the total amount of resources that are actually in a certain area of the economy. If there are fees associated with a particular business, then the cost of its product is directly affected and presumably the demand for the output of that business is going to be affected. One would think that if this is done well, this would lead to some improved allocation of resources generally in the economy.

That's a sort of general answer to a very general question.

Dr. Richard Bird: That's a pretty good answer. You get at least an A minus.

Ms. Albina Guarnieri: I hope he's not grading our questions.

Professor, are you grading our questions?

Dr. Richard Bird: No. I'm learning from them. Actually, most of the discussion has been very interesting because it shows what I said: in fact it's the specifics of these issues in different fields that give rise to all of the questions and difficulties. This is actually the first rather general issue that's come up.

My position, as was well stated, is that basically there is no reason the public should provide me with an apple. If I'm going to have an apple, I should buy it. If the public thinks I don't have enough income, they can do an income transfer program and give me the income, but I should pay the price for the apple. It doesn't matter if it's an apple or if it's taking a flight from Edmonton to Ottawa. It doesn't really matter. I am the one taking the flight, I am the one eating the apple, so I'm the one who should benefit.

Most of the discussions we've had are not about these kinds of services. They're about the regulatory services, and those are the ones where we do have the more major problems. That's been quite well discussed here today. I have nothing more to add to that.

Ms. Albina Guarnieri: Mr. Neville, I would ask you to consider whether consumers would benefit as a group from a government that draws a close connection between revenues and costs for a particular service and determines whether the service is worth providing based on the willingness of consumers to pay for it.

If I don't misquote the consumers group, I understand that you made a comment that some services should be paid by taxpayers. I wonder what you would consider as essential services. Would you include non-essential services in that?

Ms. Jean Jones: I don't know what non-essential service you're talking about. I'm particularly concerned about what I think is a very essential service, and that's protection of the health of Canadians.

Ms. Albina Guarnieri: That definitely constitutes an essential service.

Ms. Jean Jones: The concern is that this be the primary function of the regulatory body. Otherwise, why regulate it if it isn't for that purpose?

Ms. Albina Guarnieri: When I was working with Parks Canada, we knew there were virtually no limits to the fees we could generate at Banff National Park. Demand was so tremendous that we had the opportunity to charge sufficient fees to not only pay for the services in the park but also to subsidize surrounding parks and wildlife initiatives. How would you react to the philosophy of charging enough to make a profit on one popular government service to subsidize other areas that were unable to generate revenue?

Ms. Jean Jones: The example you quoted is very interrelated. You're using the park. If part of the fee you pay to use the park goes to maintenance of the ecology so that the park can continue to be, that seems to me an appropriate use. I think there would be a lot of discomfort on the part of taxpayers if they were paying a fee for something that wasn't so intrinsically part of what they were paying the fee for. That is more discretionary than protection of your health.

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Mr. Richard Neville: I thought the question was a little different in terms of what you're asking. I thought the question was, if you had the opportunity when you were at a particular park—call it Banff National Park in this instance—and a demand was there and you took advantage of it, it was because you then were in a position to use the additional revenues to offset costs in other parks. I think that's what you're referring to.

Ms. Albina Guarnieri: That's exactly it.

Mr. Richard Neville: Okay. Again, I referred to it earlier, about having other types of procedures and policies in play.

With respect to Banff National Park, or more precisely, with respect to Parks Canada and the various national parks they have, we have grouped those together. There are six parks that we have put into one envelope, if you wish, into one revolving fund, in our terminology, which is an accounting entity. We allow the cross-subsidization between the six parks, but within the parks. So they can't take the money generated in parks and use it for something else, but they certainly can use the revenues from one park to subsidize the cost of another park within that envelope or revolving fund.

We have another policy, the respending of revenues policy, which is very important. That is a policy that has a bearing on this particular discussion.

Ms. Albina Guarnieri: Thank you for clarifying with that example.

Mr. Richard Neville: I want to reassure you that you're doing the right thing.

Ms. Albina Guarnieri: There are other portfolios or envelopes that transcend the moneys going to general revenue.

I guess I'm getting at the point that Professor Bird made earlier, where—and I hope I'm not misquoting him—he equates the size of the benefit to the size of cost equal to the revenue in terms of the benefit. Does government make an effort to equate the spending in terms of the actual political acceptance of individuals being willing to subsidize certain initiatives?

Mr. Richard Neville: The policy is very clear. We are to recover the cost, not to make a surplus.

As a matter of fact, coming back to the discussion, we monitor that. If there is an excess revenue, it means we've been overcharging. It's as simple as that. So we will take steps to remedy that situation.

The policy is that the cost should equal the revenues, or the revenues should equal the cost, whichever way you want to phrase it. The bottom line is that we try to keep them equal. However, one has to be realistic. There is a business cycle. A business cycle can be two or three years, depending on the nature of the business. One has to be cognizant that in a case like that, one should take that into consideration in determining fees.

Having said that, we certainly monitor that, and we have already taken steps in some instances to review the charging procedures.

Ms. Albina Guarnieri: Does government take into account that if it is paying for a non-essential service—and I'm not talking about matters such as health care—that costs more than it's worth, consumers will not pay the cost unless it's buried in their taxes? Does government take that into consideration, that there isn't political acceptance perhaps for their hard-earned money to be spent for non-essential services?

I'm beleaguering the point, but I hope I'm getting it out.

Mr. Len Endemann: The issue of non-essential services versus essential services is often in the eye of the beholder. In fact, the exercise of applying fees does have a way of drawing out services that might not be that essential for the client group or the target group, or whatever, or today as perhaps it was before.

It's interesting that in the area of the Canadian Food Inspection Agency, for example, where there are many purposes for that agency's inspection of food and it conducts many different types of inspections and grading, some of the services it decided to cost recover fully, because they felt their grading of certain foods was entirely for the private benefit of the producer of the food.... It gave a marketability, sort of a certification of quality. But industry decided to go it alone. They said, if you're not going to do it for us, then we'll do it ourselves, and we'll organize around that. Now that's a product line that has slipped from that particular agency. That is another way in which what are non-essential services in fact can be teased down, if you will, through this process of discussion around fees.

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Ms. Albina Guarnieri: Thank you.

Professor Bird, I see that you want to jump in here.

Dr. Richard Bird: If I could just make a comment, I think the food inspection case was an interesting one, which I had actually looked at, and your interpretation of what happened there is quite correct. My friends here in the Consumers' Association might say there you have industry regulating itself. But this was actually grading. It had nothing to do with the protection of the public or anything like that, and it did seem quite appropriate.

However, I want to take exception to what Mr. Neville said in a rather interesting remark, where he said that if you had excess revenues, this meant your fees were too high. No, it actually means your service level is too low. You want to provide more services. That's unless, of course, you are talking about a monopoly. This is what's at issue here.

A lot of the discussion here, especially with the private sector, is on what are these costs that are being recovered. I've sat in on too many of these discussions with the seaway people and others, and without exception they think every toilet used in government is gold plated and that everything is incredibly expensive and over cost and whatnot. They start off by saying the costs you're trying to recover are far too high; you're not operating efficiently.

It's very difficult to have any sort of immediate answer to that, because one of the reasons you're introducing this pricing is precisely to try to be a little more efficient. Sometimes this may mean you do less of something and sometimes it may mean you should do more of something. But if those signals aren't passed through, and our government system basically stops some of them from being passed through, which was my second point at the beginning, then you're not getting the full benefits of this policy.

If you live next to the Cape Breton Highlands National Park and think you should have the right to go in at any time for free, you won't like it when they charge you fees. That's your personal view.

There's one thing I want to remark on, which I think the consumers group referred to and which I just want to underline. It's that I'm hearing the term “client” too much from federal government people. They're interpreting the term “client” wrongly. I'll take a non-federal example. If I'm regulating the taxi industry, my clients are not the taxi drivers or the taxi owners. They're the customers. The analogy is perfect. In most cases the clients are not the people you're dealing with directly. They are in fact the Canadian people. That's why I also said at the beginning that it's critical—and I agree with everything that has been said about that—that those groups always be heard.

It's also just nonsense to think there are two separate levels of discussion, one where we hear this woolly stuff and the other where we get down to the real hard finance and economics. That is equally woolly, but the woolly stuff is all about that too. So there aren't two levels. There's one level of discussion. If in fact we've been developing this two-tier discussion process, that seems like a very bad move to me.

I hardly have to tell a political group, but anyone who has taken part in political discussion knows that you go in endless circles before you ever get anywhere. Often you don't get anywhere, and that's all right. That's what the process is.

The greatest thing that has happened with this cost-recovery policy is that we've begun actually to talk about some of these issues. That is a major change in Canada, after 100 years of never discussing any of this stuff. So we may have another 90 years to go before we reach resolution.

Ms. Albina Guarnieri: We've had some focus here today, so thank you.

The Chair: Mr. Szabo, do you want to come into the circle?

Mr. Paul Szabo (Mississauga South, Lib.): Sure. Actually, I often look at it as a trip around the hexagon, because there are stops along the way. You may end up where you started. We do seem to keep coming back to the same issues, and I'm wondering whether or not when we have dialogues like this....

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Dr. Bird, we could talk about specifics and all kinds of detail, but when we started this thing, I think there was a premise that the policy seemed to be fundamentally sound, but the implementation didn't seem to be as good as it perhaps should or could be. So going back to principles, maybe we should nail down whether or not the policy is fundamentally sound. We're talking about government accountability for services delivered and whether that accountability is enhanced by user fees through a cost-recovery process. Is it a sound principle?

Dr. Richard Bird: Yes, it is, but you're quite right that the problem is in the implementation. That's what I was trying to say. It's actually only in the course of attempting to implement this that we're beginning to learn how to do it better. I view all this as a learning process.

Mr. Paul Szabo: Okay.

Dr. Richard Bird: I think the principles are sound, they are being recognized, and we're discussing them. We're learning that this whole thing is not simple. That's true. We knew that. We're questioning many ways in which we have traditionally done things in this country, and I think that's very good. Some people may not like some of the answers we reach from time to time, and we'll continue to discuss them. But this is all part of the ongoing process.

The hexagon thing is great, except it has three dimensions.

Mr. Paul Szabo: Okay, maybe we'd better call it a polygon—

Dr. Richard Bird: Yes.

Mr. Paul Szabo: —maybe even a three-dimensional polygon, in which case we could go in a lot of different ways.

That leads me to my last question, which is really for Mr. Neville. It has to do with this. If everybody is going to leave the macro picture aside and start getting into the specifics, MPs are involved; there's a review process going on. You and I have talked before, personally as well as through other committees, about involving the MPs and collaborating and discussing how we make this work. The frustration, or maybe the challenge, is that MPs have different vested interests and consensus, and getting them to focus on the issues is going to be difficult.

So you're having a review process. Have you given some thought to how we get the MPs involved in a way that is going to be helpful to the process rather than exacerbate the confusion?

Mr. Richard Neville: I think the fact that we're here this morning for a second time bodes well in terms of getting parliamentarians' views on how they feel we have been doing vis-à-vis the policy and its implementation.

I would go on to say that we're looking forward to the report. I think that will have a lot of weight in terms of how we position ourselves to make further recommendations.

Also, I am of the view that we may have round tables with MPs, which would allow us again the opportunity to get more specific thoughts from each and every one of you. We certainly are open to that, and we would be more than pleased to entertain a hosting of those kinds of round tables. But I really think without parliamentary input it would not be a fulsome consultation, and so we certainly want to do that.

Mr. Paul Szabo: I think we all look forward to that process. Thank you.

Thank you, Mr. Chair.

The Chair: Thank you very much, Mr. Szabo.

I have some questions.

I want to get some feedback from you. What if this committee were to recommend the following: that the information on new surcharges be made easily available to all interested parties and should include the formula used to determine the user charge and an indication as to whether it is a mandatory business charge or not, the amount it generates, and the performance promised by each user-charge program—the estimated public-private benefit should also be included, as well as the justification; that the fee revenues should be published annually with the publication of the budget—data should be provided on each charge; and uniform standards should be established by Treasury Board to be applied by all departments and deviations from those standards must be justified by the departments and agencies? How would you feel about that?

Ms. Hillard.

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Ms. Jennifer Hillard: It sounds good. I think there's one thing you've missed for us, which is that when you're doing some of these tests and studies and examinations and you're comparing Canada with other countries and you're comparing how things work from the financial side, because government regulation is there to protect health and environment, you have to look at the delivery side as well. You don't just compare the costs; you have to look at the results. If it's costing a bit more in Canada and we're getting better results, so be it.

We have some really good regulatory processes in this country. Let's not destroy them in order to save a few dollars. That's not to say tax people to the hilt, but don't look at the money and ignore the quality of what you're doing. That's what's beginning to happen, and that's what's scaring us.

The Chair: Since I have you on that topic, you have raised some complaints about the cost-recovery program. I'm just wondering whether this is evidence of a wider problem in government, namely that regulations governing Canadian businesses are overly burdensome. Are they efficient?

Do you think that perhaps, instead of just stopping at the issue of cost recovery, the time has really come for what we could call a red tape commission, where we would dedicate ourselves to evaluating and streamlining regulations? For example, we could cut obsolete regulations. I don't know when the last time was that we looked at regulations in government, but I'm sure there are some that are outdated and don't make sense. When do we sort of clean up the house a bit?

Ms. Jennifer Hillard: There's a piece of the Health Protection Branch act that has been in place since 1895 or something having to do with quarantines for certain animals. So yes, some of them need cleaning up.

Where we're concerned is that when you break up the pieces and you look at the cost here and you look at the efficiency there and you look at the effectiveness somewhere else, it's fairly easy to go in and say it's not very efficient and it's costing so much. So you cut out employees and you cut down the costs and you cut back the cost recovery and then you finish up with a system that doesn't work right.

Our concern is that we've tended to break it up. If somebody can come and look at these three things together, that will be great, but let's not destroy a good Canadian regulatory system where it is good and where it is working, where it is protecting the health of Canadians and the environment and keeping a good social structure in place. Let's not destroy that because it looks a little inefficient or it's rendering a few extra cost-recovery fees. Let's balance those three things out. We mustn't tip it one way or the other.

The Chair: Professor Bird.

Dr. Richard Bird: I just want to comment. Actually, I think this is what economists do. The way we would normally look at an issue like this is to figure out what effects you want, what program you want. Then you look at the most efficient way to get it. In these government activities, you always start by determining what it is you're trying to do.

We may well have compartmentalized things in some departments so they don't do it, but that's why we have the central agencies. They're supposed to be doing that, right? But you're right, of course; that's what we try to do.

The Chair: The issue of the role of government, sort of reinventing government, is very much a hot topic in political circles. Even when you're dealing with things like cost recovery, regulation, delivering services to people....

Do you share best practices, for example, across agencies? What measures have you taken to break down the barriers between agencies? Are you using user-friendly, plain language? Do you aid in compliance, in providing Canadians with compliance tools? What type of partnership with communities have we established? I'm now talking about this in general terms, vis-à-vis the role of government.

Mr. Richard Neville: Again, we have a policy centre dedicated 100% to cost recovery. Mr. Endemann heads up that particular division. They have expertise that is being sought on a daily basis by various departments, whether it be in the context of setting up a new program where there are cost-recovery implications or looking at ongoing programs where there are some questions in terms of interpreting the policy, or whether it's in how to better consult with stakeholders, or even in the more mundane applications of the costing that has to take place in terms of determining the methodology to be used.

• 1300

I think it's fair to say that there are a number of fora where discussions do take place between professionals in that particular field. We facilitate that through various meetings and documentation that's circulated.

I would let my colleague, John Adams, answer that from a departmental perspective. I don't want to put you on the spot, John, but what are your thoughts? Do you feel there is in fact a forum or a number of fora that allow you to have your staff discuss common issues as they affect cost recovery?

Commr John Adams: Not that I would ever give Treasury Board credit for anything, because those central agencies are really a problem for us line department guys who have real jobs to do, but frankly, I deal with mine regularly.

The Chair: Do you want to delete that from the record?

Voices: Oh, oh!

Commr John Adams: We maintain close contact with Len and his staff at all levels because we do want to make absolutely certain that we apply the policy in a way that's consistent across the board. If we don't, the customers out there will be less than enthused. In my case, the maritime industry is being impacted upon by more than just what I'm imposing on them, and they'll draw it to my attention immediately if there are inconsistencies or if we're doing things in a less efficient or a less smart way than other agencies or departments are. We rely very much on the centre to keep us abreast of what is right and what is wrong and what is being done across the piece.

The Chair: How do you feel about the comment made by Ms. Hillard that there are some regulations that date back to the 1800s?

Commr John Adams: Well, I have one. Our minister is responsible for the NWPA, the Navigable Waters Protection Act, and I don't think it has been reviewed in over 60 years. We're doing it now. The regulations based upon it, of course, are based upon legislation that is just that old.

Any of you who have had anything to do with use of water will know that aquaculture in this country is starting to explode, and NWPA is standing in the way of that explosion. We are moving as quickly as we possibly can to make those changes, but every change we make to accommodate one group inevitably has side effects, some of them not favourable, on other groups. To the extent that we adjust NWPA to accommodate aquaculture, we do impact upon the people I'm closest to: boaters, both recreational and commercial.

So it's a constant balancing act. Generally speaking, what drives us to those changes are the customers, the people who are impacted upon. We don't go looking for changes unless the folks out there tell us that the change is required. I've received that in spades with respect to the NWPA. We rely on the folks who are affected to come to us and beat up on us and get us moving on.

The Chair: If we were to have a red tape commission, that would focus the national agenda on creating a more efficient economy, better services for people, client-driven services. It would focus also our own agenda here as a committee to really update regulation in Canada.

Everywhere I go throughout the country, there is always somebody who comes up to me and says this regulation doesn't make sense; it doesn't apply. When I look at the fact that we are more technologically driven, that we do live in a new economy where governments are attempting to view citizens as clients, I think we need a big bang in the area of regulation to modernize the system. It would be great if we could announce to the Canadian public that we've cleaned up the books here, 20% or 30% of the regulations, and it looks like we're on top of the game.

I don't know what your reaction is to that kind of agenda. Of course I'd like to know.

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Dr. Richard Bird: I have a dual reaction. One of the pleasures of getting older is that you see things aren't trends; they're all cycles. We've been through this before. I would suggest that before you put too many eggs in that basket you look back at the previous very detailed and extensive work that was done on all of these issues here at the federal government about 20 years ago, and the magnificent outcome of all that work.

Secondly, the particular thing about the number of regulations and so on is that this is something that reminds me of a tax simplification; yes, right, next question. It's one of those things that sounds good, it's appealing to everybody, you can make a quick sales pitch on it, but when you actually begin to get into it and look at it you'll find it's unbelievably difficult to do much with, precisely because of the reason Mr. Adams so well said, that one person's meat is another person's poison. I'm being protected against you, but that means of course that you're blocking me. That's what a lot of these regulations are about.

They're a kind of administrative law codification of the political system, and of course it changes and evolves over time and of course there are old bits left around. Just because they're old doesn't mean they're wrong; it doesn't mean they're right either. I hope this isn't too political, but it's unlikely that a red tape secretariat in Ottawa would be any more effective than the one in Toronto.

Thank you.

Commr John Adams: I'd like to comment on it, and it's more an academic comment than anything. People ask me after 40 years in government what is the biggest change, what is it that makes life interesting and even more complex and difficult. And they ask that of me because I am one of the older members of certainly our department. I'll tell you what it is. It's citizen engagement. That is phenomenally challenging, particularly for someone like me who has been for a long time that faceless bureaucrat. You're no longer faceless; you are out there facing it every day.

What has helped that, depending upon your point of view, has in fact been fees. Because they pay, they say, and they want to say it to you. I spend a phenomenal amount of time out dealing with those people, and that is what's going to generate the change. They're going to beat on us regularly, certainly on me with respect to maritime issues. And there's no ducking that because they're there, they're in your face.

Frankly, this is a challenge that is quite unique for us, and certainly we appreciate therefore what you go through, because they're in your face far more than they're in ours, because you're more public. But I think that's what's going to probably be more effective than, with all due respect, an initiative such as you've just highlighted. The people themselves are out there and they're doing it; they're engaged big time and there's no dodging that. This is true particularly in my area where it is very commercial and they tend to be reasonably sophisticated. They are now becoming far more sophisticated with respect to making themselves heard in public fora like this subcommittee.

The Chair: Where do you think they would make themselves heard?

Commr John Adams: To give you an example, last year for the first time ever they had here in town, because they want to make themselves politically significant, a maritimes day. They brought in a number of CEOs and they got audiences with a whole host of both senior bureaucrats and ministers. They in fact were here in front of you a week or so ago; not that long ago they wouldn't have been here. They've established new associations. They have the Canadian Shipowners Association in town. They have the Chamber of Maritime Commerce in town. They're far more sophisticated with respect to how to make their positions known, and they are very much part of all the.... Because we're regionalized within the department, we have had to establish, at all levels, contact groups for them to come in and make their positions known.

The Chair: I'm not following this, because essentially these groups would be coming to our committee, or I don't know which committee of the House or special committee that would be looking at the issue of the regulatory environment in Canada. That would provide those individuals with an opportunity, and that's no different in this committee.

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The point I'm making is that you have to give people a vehicle to express their point of view. While they may be talking to you, I'm not privy to the conversations you have on the phone. I like to get the facts in front of an elected group of individuals who are ultimately responsible, because we need avenues to let you know what people are saying.

I think there is an agreement, or at least a consensus, that in fact there are some challenges to face with regulations in Canada. There's no doubt about that.

So I don't understand why you would not be in favour of something like that.

Commr John Adams: Oh, it's not a question of not being in favour of it. Obviously my being in favour or not is neither here nor there. If it supplements folks' ability to make their positions known, by all means, but I'm saying that I think it's perhaps less required now than it might have been in the past. But by all means—

The Chair: No, I just want to make that—

Commr John Adams: Oh no, I would not fight against it.

The Chair: Dr. Bird, did you have anything to add?

If not, on behalf of the committee, I would like to thank all of you very much for another interesting round table.

The meeting is adjourned.