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Émilie Thivierge
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Émilie Thivierge
2021-06-14 11:11
Madam Chair, I'm sorry to interrupt.
Since there were no amendments adopted, the committee doesn't need to order a reprint of the bill.
Émilie Thivierge
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Émilie Thivierge
2021-06-14 11:11
No, Madam Chair.
We just need to suspend to go to the in camera part of the meeting.
Philippe Méla
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Philippe Méla
2021-06-11 13:13
Mr. Chair, clause 13 was not amended. It was just—
Philippe Méla
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Philippe Méla
2021-06-11 13:16
Yes, sir.
Aimée Belmore
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Aimée Belmore
2021-06-11 13:18
The question is this: Shall the ruling of the chair be sustained?
If you vote yea, you agree with the chair and the ruling will be sustained. The amendment would be, I believe, outside the scope or inadmissible. It would sustain the chair's ruling.
If you vote nay, then you'll be able to vote on this amendment.
Aimée Belmore
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Aimée Belmore
2021-06-11 13:18
Of course.
Shall the chair's decision be sustained? If you agree, you say yes, and there will be no vote on this amendment. If the question is “Shall the chair's decision be sustained?” and you vote nay, then we'll proceed with a vote on this amendment.
Aimée Belmore
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Aimée Belmore
2021-06-11 13:19
Is the question clearly understood?
Aimée Belmore
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Aimée Belmore
2021-06-11 13:19
Thank you, sir.
Sir, did you want me to proceed with the vote?
Philippe Méla
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Philippe Méla
2021-06-11 13:22
Yes, it is.
Philippe Méla
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Philippe Méla
2021-06-11 13:40
Thank you, Mr. Chair and Mr. Genuis.
I think there are two things to consider. There is the five-hour mark, before and after. What the chair did at the arrival of the five-hour mark was basically to interpret what the motion of the House was saying in terms of how to consider the amendments present in the package, where they were either deemed moved or were just in the package, staying there, and what to do with them.
Since the motion of the House is silent on these amendments, the chair made two rulings. The first one was on the amendments from the Green Party. Those ones are, generally speaking, deemed moved. They were considered by the chair and there was no overturning of that ruling.
Then the chair made a second ruling considering the rest of the amendments. He proposed that they would be not proposed by the committee, and the committee overturned that decision. That's why we are now voting on all the rest of the amendments, plus the Green Party amendments.
Now, to your question on adding subamendments at the present time, that is clearly specified in the motion of the House. In the last part of the paragraph, it says:
...and, in turn, every question necessary for the disposal of the said stage of the bill shall be put forthwith and successively, without further debate or amendment.
There is before the five-hour mark, and after. Clearly, we are past the five-hour mark. Therefore, no other amendment can be proposed—or subamendment, for that matter.
In this case, I would simply suggest that you bring it to the floor of the House, because basically you can't appeal an order of the House.
Philippe Méla
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Philippe Méla
2021-06-11 13:44
Thank you, Mr. Chair.
I'm not sure I can add more than what I explained earlier. The motion of the House, as I indicated earlier, is silent when it comes to the amendments that were in the package. At the end of the day, the committee decided to be able to consider all the amendments that were in the package before the committee at that point, because the motion of the House was silent on that particular point.
When it comes to amendments and subamendments, at this point now, the motion of the House is clear and indicates that there cannot be any further debate, amendments or subamendments. I think there is a slight difference between the two rulings that were made by the chair: one for precision on something that was maybe missing in the House order, and one now that is clear from the House order.
Philippe Méla
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Philippe Méla
2021-06-11 13:46
Generally speaking, I would say yes to that, but here—
Philippe Méla
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Philippe Méla
2021-06-11 13:47
—we are under the purview of a House order and that's where we're at. I don't think that.... When you say the chair made a ruling, the chair is following what the House order is, which basically tells us no further amendments or no further debate.
Danielle Widmer
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Danielle Widmer
2021-06-11 14:08
If a member agrees with the ruling, the vote should be yes. If a member disagrees with the ruling, the vote should be no.
(Ruling of the chair overturned: nays 8; yeas 3)
Philippe Méla
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Philippe Méla
2021-06-11 14:33
Mr. Chair, I'm sorry to interrupt.
Philippe Méla
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Philippe Méla
2021-06-11 14:33
CPC-12 was already ruled out.
It was consequential to amendments CPC-9 and CPC-10.
Philippe Méla
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Philippe Méla
2021-06-11 15:07
Excuse me, Mr. Chair.
Clause 47 was not amended. BQ-37 was just creating a new clause 46.1.
Philippe Méla
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Philippe Méla
2021-06-11 15:16
Thank you, Mr. Chair.
As you know, Mr. Champoux, there are a number of committees working on bills right now, and many of them are at the reprint stage. So all these bills end up in the same place for reprinting. That's why the process takes a little longer than usual.
In the case of Bill C‑10, a lot of amendments and subamendments have been passed, so it's going to take a little bit longer still. However, we will try to produce the report by Monday or Tuesday at the latest. We will do our best at the end of the week.
Jacques Maziade
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Jacques Maziade
2021-06-10 15:36
Yes and no. Page 105 would be G-14, but then we have three amendments in between, which are CPC-11, CPC-11.1 and CPC-11.2. LIB-9.1, which was just added this morning, should go at the end of the list. It's just before PV-26 and page 107.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 15:58
Thank you for the question, Mr. Champoux.
I would say that the proposed amendment will put a heavier burden on the CRTC, because for every decision, every order and every regulation, the CRTC will have to seek an outside legal opinion and then publish it on its website and in the Canada Gazette. I believe that's what is proposed.
Again, it's not a question of whether or not the CRTC is subject to the Charter; obviously it is. Obviously, too, recourse is available should anyone wish to challenge a decision made by the CRTC.
If this amendment carries, it will surely increase the burden on the CRTC, because it will require it to seek a legal opinion for each of its decisions and then publish it in theCanada Gazette.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 16:01
Thank you for the question, Mr. Champoux.
I will point out two things.
First, because the CRTC is an administrative tribunal, every decision it makes is subject to judicial review. That means people can use judicial review to challenge a decision made by the CRTC. We know that CRTC decisions sometimes go to judicial review.
Second, section 31 of the Broadcasting Act already provides the right to appeal a CRTC decision on a question of law or jurisdiction. Again, section 31 provides a right of appeal that can be exercised if one believes that the CRTC has misinterpreted the act in a decision it has made.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 16:03
Thank you for the question.
We know that, since the Broadcasting Act came into force, it has included a section indicating that the act must be interpreted with respect for freedom of expression and freedom of creation, among other things. Therefore, the government considers that this obligation is already included in the act.
Could a CRTC decision possibly violate the Canadian Charter of Rights and Freedoms? Yes, it's possible. Again, that is why the act provides certain remedies so that there is oversight by the court system. That's why we have federal courts that can ensure that decisions made by administrative tribunals like the CRTC obey the law.
For example, if there is a suspicion that a regulation on the issue of discoverability is not consistent with the Charter, a mechanism exists to go the court and get a response on that issue.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 16:06
Thank you for the question.
Under proposed subsection 2(2.1), which is still in the bill, an individual who uses social media to disseminate content is not considered a broadcaster. They are therefore not subject to CRTC regulation.
There is no need here to consider whether that individual can participate in CRTC processes or whether they must comply with CRTC regulations or orders, as proposed subsection 2(2.1) is quite clear: An individual, unless they are affiliated with a social media outlet, is not considered a broadcaster, regardless of how many subscribers they have or how much annual income they earn from the content they post on social media.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 16:09
Thank you for the question.
As my colleague Drew Olsen explained earlier, the CRTC will be launching public hearings where people will have a chance to submit their views as well as documentation related to the regulatory process.
With respect to discoverability requirements that may apply to social media companies, anyone will have the opportunity to express their views on the subject. It's expected that digital creators and the associations representing those creators will have a keen interest in these regulatory issues and will participate in the process.
Philippe Méla
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Philippe Méla
2021-06-10 17:03
Mr. Aitchison, the motion of the House is silent as to what to take into consideration. We have the package that's here, and the motion says, “every question necessary for the disposal of the said stage of the bill shall be put forthwith and successively without further debate or amendment.”
Basically, the interpretation that's being given by the chair is that there are the amendments from the Parti vert that are deemed moved, according to the motion that was passed by the committee, so those are going to be voted upon. The others—that's the interpretation of the motion by the chair of the committee—will not, because there is no motion adopted by the committee that designates them as deemed moved.
Since this is an interpretation by the chair of the motion by the House, it is up to the committee to decide if the committee agrees with this interpretation or not. We have had a few examples of that happening in the past.
It's an interpretation that the chair is giving on the motion by the House, and after that, it's up to the committee to decide if it agrees or disagrees with the ruling of the chair.
Philippe Méla
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Philippe Méla
2021-06-10 17:29
I think you skipped BQ-27.
Philippe Méla
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Philippe Méla
2021-06-10 17:32
Yes, if permitted. Thank you.
It depends, really. In this case, it's going to take quite a few days because of the number of amendments. I suspect either Monday or Tuesday for reporting to the House if we finish tomorrow.
Philippe Méla
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Philippe Méla
2021-06-10 11:14
Mr. Chair, yes, indeed, we are going to CPC-9.5 now, because CPC-9.4 was dealt with earlier at the previous meeting where unanimous consent was asked for because it was not in the right place. Now we are at CPC-9.5.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 11:21
Thank you, Mr. Chair.
Thank you, Mr. Shields, for the question.
There would be a few things I would underline with respect to the amendment that has been tabled.
The first thing is to highlight a point that came out in the committee's discussion with respect to the charter and freedom of expression, and to remind the committee that, of course, the CRTC is bound by the charter. Its decisions are already subject and will be subject in the future to review for charter consistency through things like judicial review of its decisions, etc.
Second, perhaps this may not be well known to the committee, but the CRTC is actually already served by independent legal counsel. In other words, its lawyers are not Department of Justice lawyers. In that respect, the CRTC already avails itself of independent legal advice.
The third thing I would note is that the amendment that is on the table would be quite exceptional in the sense that we're not aware of any other regulatory body that is in the practice of publishing its legal opinions. My understanding of the amendment is that the requirement would actually be quite significant in the sense that it would apply to each regulation or order or condition imposed on online undertakings. We expect that those would be quite numerous.
At the end of the day, Mr. Shields, the impact on this would be that any time the CRTC made a regulation or an order it would have to go and get a charter analysis done with respect to that, and then publish that and make it available. Again, from what we have seen, that would be fairly exceptional in the current regulatory landscape.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 11:24
Thank you for the question.
The expectation is certainly that the CRTC would consider the charter in making its decisions. Again, the CRTC already has a team of independent legal counsel that would provide that opinion.
To your point, publishing those legal opinions would obviously then subject them to external scrutiny. The question of whether that's a safeguard or not is a judgment call that I would leave up to the committee. Again, it would be fairly exceptional. This is not done.... When a legal opinion like that gets published, it waives solicitor-client privilege. That can complicate matters if ever there are court proceedings in this respect.
Again, not to go over ground that we've already been on, but that's why, for example, the charter statement that's published on a bill is not a formal legal opinion in a sense, but rather an analysis of how the charter is potentially engaged.
This would be fairly exceptional to require a regulatory agency like that to publish a legal opinion with respect to every decision it makes with respect to a certain kind of entity.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 11:28
I don't have the legal budget at the tip of my fingers. What I can say to you is that CRTC decisions are subject to judicial review on a regular basis in the sense that there are applicants who choose to have decisions reviewed by a court. Some of those are fairly high-level, high-profile proceedings, and others are less so. Again, just to reiterate, that's why there are mechanisms in place. There's judicial review, and there is actually another provision in the Broadcasting Act as well. If a party to a proceeding feels like the CRTC has made an error in law or something along those lines, there is also a mechanism by which it can have that decision reviewed by the federal court system as well.
One thing that I would note or remind the committee—and perhaps it speaks a little bit to Mr. Shields' earlier question as well—is that proceedings are subject to a public process in the sense that anybody who wants to make a submission and put something on the record has the opportunity to do that. Again, when the CRTC is making a new regulation or an order, there would be an opportunity for organizations or individuals to make submissions, and if they have concerns about the impact on charter rights, for example, they could make sure that those are part of the public record. Then, of course, the CRTC will have to consider those in its decision-making.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 11:32
Thank you for that question.
There are a couple of things. One would be just to stress off the top—and again, this perhaps picks up on some of the committee's debate from yesterday—that the effect of proposed section 2.1 would mean that any individual who is unaffiliated with a social media company, no matter how big their following is or how much money they make, is not to be considered a broadcaster for the purpose of the act.
Again, even if you have millions and millions of followers, that provision means it's not a question of your being considered a broadcaster. Again, for the most part, individuals will not be participating in CRTC proceedings because the act will not apply to their activities on social media services, for example.
What we see in this space, Mr. Aitchison, is that you have individuals or organizations coming to the table to represent the public interest that may not be sophisticated corporations able to hire legal teams to represent them. A good example in this space is an organization called the Public Interest Advocacy Centre, which raises many of these issues on behalf of organizations or individuals.
One of the things the government is proposing in Bill C-10 is to actually ensure there is better support for public interest representation in CRTC proceedings. Right now, the CRTC really has no formal mechanism to ensure the activities of these organizations can be funded.
If you look at Bill C-10, the CRTC can seek contributions to support the participation of public interest organizations in CRTC proceedings. The government is doing that very intentionally, recognizing that, obviously, organizations and voices are needed at the table. The goal in that is to secure more long-term, sustainable support for those organizations so that they remain viable and can continue to bring those issues to the table and to CRTC proceedings.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 12:28
Thank you for the question, Mr. Rayes.
My answer will depend on the purpose of the amendment.
If the purpose of the amendment is to provide an opportunity for outsiders to submit legal opinions as evidence in a regulatory process, I would say that it is already happening. People can already make a submission to the CRTC and, if they want to file a third party legal opinion, they can do so. Once it's admitted into evidence, it certainly has to be considered by the CRTC in making its decision.
If the purpose of the amendment is to require the CRTC to publish a legal opinion that represents the CRTC's position, I would say that this could actually cause harm, because it affects solicitor‑client privilege, a principle recognized by the Supreme Court as a fundamental principle of the Canadian legal system. Given the potential for harm, we believe that this would make for an obligation that would be fairly exceptional in the Canadian legal system.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 12:31
Thank you for the question, Mr. Rayes.
I would like to clarify the government's position. The issue here is not whether the CRTC is complying with the charter. As I mentioned, the charter applies to the CRTC, and mechanisms are already in place for people if they feel that the CRTC is not complying with the charter. For example, they can challenge a CRTC decision in federal court.
To answer your question, I should say that Bill C‑10 does propose to add paragraph 11.1(1)(c) to the Broadcasting Act, which gives the CRTC the power to make regulations respecting:
c) supporting participation by persons, groups of 10 persons or organizations representing the public interest in proceedings before the Commission under this Act.
Once again, the bill includes measures to ensure the sustainability of funding for public interest groups by providing funding for those groups, as required.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 12:34
Thank you for the question, Mr. Rayes.
I have two points to make in response.
In fact, a fund already exists to support public interest participation in CRTC processes in broadcasting. It's called the broadcasting participation fund. The problem is that there is really no long‑term funding to support the activities of the broadcasting participation fund. The fund has supported a number of organizations that have intervened in cases before the CRTC. I gave Mr. Aitchison the example of the Public Interest Advocacy Centre. It is an example of an organization that is trying to ensure that the interests of Canadians are taken into account. I am currently on their website.
Their mission is “To help Canadians save money and feel respected in the provision of regulated services”, and the vision of the organization is “To ensure no Canadians are taken advantage of in the provision of essential, needed regulated services.”
We can see that the Public Interest Advocacy Centre is very active in the CRTC processes.
Once again, we recognize that there is a problem with funding, so we want to make sure that the CRTC has the power to go ahead and create a fund like the broadcasting participation fund that will support those organizations in the long term. That is why the bill is proposing to add paragraph 11.1(1)(c) to the act.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 12:38
If I understand the question correctly, you want to know whether a citizen is able to participate in the CRTC processes and make submissions. The answer is yes.
Of course, I recognize that going through a regulatory process requires an effort on the part of an individual. However, it is possible. A good example is the CBC licence renewal process. The service affects many Canadians. We see that Canadians do make submissions through this process because they have an opinion about the public broadcaster.
So it's possible for someone to participate, but it takes some effort for them to go through the various steps of the CRTC process.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 12:39
I'm sorry, your question was about whether the funding will be available.
My understanding is that the broadcasting participation fund, to which I referred, is limited to groups and organizations representing consumers who have a non‑commercial interest.
Could the proposed subsection 11.1(1) be used to create a fund to support individual participation? The answer is yes, absolutely. Paragraph 11.1(1)(c) provides for “supporting participation by persons”, so this power is provided. However, if we ever want to move in that direction, the mandate of the broadcasting participation fund may need to be amended.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 12:41
The purpose of proposed paragraph 11.1(1)(c) is to ensure representation of the public interest. Of course, if it is used to support an individual, the individual's participation in a CRTC process must be related to the public interest.
If this relates to the regulation of broadcasting activities, again, in the vast majority of cases, individuals will not be considered broadcasters. Proposed subsection 2(2.1) is very clear with respect to individuals who use social media: they are not considered broadcasters and are therefore not subject to CRTC regulation, regardless of their number of followers and their revenues. Again, someone who has a large following on social media will not be subject to CRTC regulation as a broadcaster.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 12:49
Thank you, Mr. Waugh.
I might make a couple of introductory points and then suggest that my colleague Mr. Olsen jump in, who is very well versed in CRTC processes.
Bill C-10 certainly envisions a transparent process when it comes to questions of regulations or orders. The intention is certainly that anybody who wants to participate in those proceedings would have an opportunity to do so.
Mr. Chair, if you'll permit me, perhaps Mr. Olsen can just quickly jump in and explain how this would work in a typical CRTC process, the kinds of things that would be naturally published on the CRTC's website and the materials that would be made available.
Drew Olsen
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Drew Olsen
2021-06-10 12:50
Thank you, Mr. Chair.
When the CRTC initiates a public proceeding, it publishes a notice of that proceeding on its website and, in most cases, in the Canada Gazette. Then it calls for comments. It has rules of procedure around the time periods and the process by which it gets those comments. Sometimes there's even a reply period, during which the commission would give intervenors a chance to reply to other comments. Sometimes there isn't, but that's governed in the CRTC's rules of procedure.
The CRTC then takes all of those submissions and considers only that information that's on the public record—of course, subject to any information that was filed in confidence. Then it makes its decision. For anything that's filed in confidence, the rules say that there must be an abridged version without the confidential information filed. It's usually just financial information. It's usually just numbers that get blanked out. All of that information is available to all the parties, other than the actual numbers. Then the commission takes all of that and makes its decision.
The decision is always published on its website, and the decision is almost always published in the Canada Gazette as well. The CRTC takes transparency very seriously in that regard. It is an administrative tribunal, so if it has failed to follow any kind of due process, then that would be subject to judicial review.
Drew Olsen
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Drew Olsen
2021-06-10 12:53
Thank you, Mr. Chair.
Thank you for the question, Mr. Waugh.
Those commercials you refer to are part of the licence renewal process. They are an obligation that the CRTC imposes on licencees to make public the notion that the licence is being renewed and that people can make comments on the conditions of licence.
The situation in Bill C-10 is that the proposal is to move away from a conditions of licence model and towards a conditions of service model. The clause that this committee is currently debating—clause 7 of the bill, which would include proposed section 9.1—does give the CRTC the powers to make orders with respect to conditions of service that would need to be put on. The CRTC would, under the sort of umbrella, or the chapeau if you like, of proposed section 9.1, have the ability to make requirements related to CRTC proceedings, such as advertisements of various CRTC proceedings, if it chose to.
That, of course, also depends on what this committee and this Parliament ultimately decide to do on whether conditions of service will have a seven-year maximum duration or whether those will be subject to different periods of review.
Bill C-10 does give the CRTC the power to require, at any time that significant conditions of service are being looked at by the commission, that messages be broadcast by licencees to that effect.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 12:57
Mr. Aitchison, you are right that I don't have that figure at the tips of my fingers.
What I can say is the fund has had a multi-million dollar budget over the course of its time, in the course of its existence. To date, it has been funded sporadically by what are called “tangible benefit decisions”. When the CRTC approves certain transactions, one company buying another, they divert or require some of the proceeds from that transaction to go towards supporting public interest objectives. That is how the broadcasting participation fund has been funded to date.
The challenge is that there's really no sustainable funding source in place. Actually, its coffers are getting low. Again, one of the reasons the government included this power in proposed section 11.1 was to ensure the CRTC has a lever it can use, other than tangible benefits from transactions to support things like the broadcasting participation fund.
They have supported a number of different intervenors in broadcast proceedings over the years. They do publish an annual report that I think is available on their website. We can certainly get you the link to that if it's of interest.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 13:06
The government's position is that the CRTC is bound by the charter. It needs to respect the charter, and its independent legal counsel will help it do that. If ever there is a question about its not having respected the charter, there are meaningful avenues of recourse available where individuals or organizations can have oversight from the federal court system.
As I indicated to Mr. Rayes, if the objective is to make sure that there's a way that third parties can put legal opinions on record, have them made public and have them considered by the CRTC, the government's position is that this is already able to happen under the framework in Bill C-10, as Mr. Olsen outlined. There is a process whereby anybody can make a submission to any kind of CRTC proceeding. Therefore, if there are individuals or organizations wanting to put on record a legal opinion that speaks to the issue of charter and have that be part of the public record, part of the proceedings that the CRTC must consider, then there is already a way for them to do that under Bill C-10.
Thomas Owen Ripley
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Thomas Owen Ripley
2021-06-10 13:08
Yes. Proposed section 2.1 provides that individuals who use social media are not to be considered broadcasters for the purposes of the act unless they are, in some way, affiliated with the social media service. Again, that is irrespective of how many followers they have, even if the count is into the millions, or how much revenue they make. They are not to be considered broadcasters under the Broadcasting Act and are not subject to CRTC jurisdiction thereof.
View Dominic LeBlanc Profile
Lib. (NB)
Madam Chair, thank you for inviting me. Good afternoon. It's the afternoon in Fredericton, New Brunswick, where I am today.
Good afternoon, colleagues. I'm pleased to appear before your committee, before PROC. I was a member of PROC for a number of years, so I am familiar with the good work your committee does. It's a privilege for me to be here to discuss Bill C-19, an act to amend the Canada Elections Act with regard to the COVID-19 response.
Bill C‑19is our government's response to one of the priorities that the Prime Minister entrusted to me, namely to work with all Parliamentarians to ensure the passage of any amendments necessary to strengthen Elections Canada's ability to conduct an election during the pandemic and to allow Canadians to vote safely. Obviously, the time during which we work with you and hear your views on this issue is important to our government.
As the chair indicated, I am joined by two senior officials of the Privy Council Office, Al Sutherland and Manon Paquet. They will be available to answer technical questions or to offer a perspective that perhaps I'm not able to contribute.
We are fortunate to have a robust legislative regime in the Canada Elections Act and a world-class electoral management body in Elections Canada, which celebrated its 100th anniversary just last year.
The COVID-19 pandemic has been among the most challenging issues in generations, leading to far too many deaths and severely affecting vulnerable people around the world. Governments have, in turn, been forced to take unprecedented steps to stem the virus's spread.
While Canadians have demonstrated incredible resolve, they need to know that in spite of the pandemic, an election can be administered in a way that is safe, secure and accessible to all. Indeed, this topic has seized the attention of all elected officials and election bodies, as evidenced by the Chief Electoral Officer's call for temporary changes to the act and by your timely study, which put forward several recommendations in support of a safe election in these challenging times. We followed them closely and reflected them in many ways in Bill C-19.
Bill C-19 proposes changes that protect the health and safety of Canadians while allowing them to exercise their democratic rights. A three-day polling period will spread electors out and support physical distancing and other public health measures at polling stations. The three-day polling period specifically recognizes Monday as a voting day. We believe this to be important. Maintaining the Monday voting day recognizes that in some circumstances people might not be able to vote because of a religious obligation over the weekend and that public transit, together with child care options, may be more limited over the weekend. Thus, we thought keeping Monday as a voting day was important. Simply put, we're providing electors with as many opportunities as possible to vote should there be an election during the pandemic.
Bill C-19 would also support a safe vote in long-term care facilities and in facilities for persons living with disabilities. Sadly, as one of the most at-risk populations, the residents of these facilities have been gravely impacted by the pandemic. I think all of us were touched by some of the very difficult stories of COVID-19 in the context of long-term care homes. Bill C-19 would provide enhanced flexibility to election workers through a 13-day period during which they can work with long-term care facility staff to determine the most opportune dates and times to deliver the vote in those facilities.
To be clear, this does not mean that voting in long-term care facilities would take place over 13 days; it merely means that facilities would be able to determine for themselves the appropriate window for their residents to safely cast their ballots. This will support a vote that is safe for the residents, the election workers and the staff in these homes.
Holding a general election at any time requires an organizational tour de force. Canada is a large and diverse country, with 338 electoral districts of varying sizes and composition. In times of pandemic, the task is all the more daunting.
Public health circumstances across the country continue to evolve, pointing to a clear need for increased legislative authority for Elections Canada to react to any specific circumstance that may arise across the country in a particular electoral district. Accordingly, Bill C-19 would provide the Chief Electoral Officer with enhanced adaptation powers to adapt provisions of the act in support of the health and safety of electors and those working or volunteering at the polls themselves.
We have seen that jurisdictions across the country and around the globe have had elections during the pandemic and have seen a steep increase in mail-in voting. Research conducted by Elections Canada indicates that potentially up to five million electors may choose to vote by mail if there were an election during a pandemic.
At the federal level, Elections Canada has delivered this system safely and securely for decades, and there are important safeguards designed to maintain the secrecy and the integrity of the vote. Nothing in Bill C-19 would change that. In fact, we're proposing targeted mail-in voting measures to strengthen a system that we expect will see a surge in usage. Among its proposals, Bill C-19 will allow electors to apply online for a mail-in ballot and will establish secure mail receipt boxes across all polling stations for voters to drop off their ballots. To maintain the integrity of the vote, Bill C-19 includes strict prohibitions on installing or tampering with secure mail reception boxes.
Lastly, I would like to stress that the mail-in ballots cast within electoral districts will continue to be counted locally. As honourable members know, there was a drafting discrepancy between the English and French versions of a provision in Bill C-19 that made its meaning unclear. As a result, we will bring forward an amendment correcting this unfortunate error during the committee's clause-by-clause study of this bill. As you are aware, the Speaker ruled that this error can be corrected by the committee in studying the legislation.
Madam Chair, in conclusion, I would light to highlight three points.
First, these measures would be temporary, only applying in the event of an election held during an ongoing pandemic. These measures would cease to be in effect six months, or at an earlier date determined by the Chief Electoral Officer, after a notice that the Chief Electoral Officer publishes in the Canada Gazette that indicates the measures are no longer necessary in the context of COVID-19. This notice would obviously only be issued following consultations with the chief public health officer.
Second, the long-term care measures and adaptation powers would come into force immediately upon royal assent. The remaining measures, including the three-day polling period, would come into force 90 days following royal assent, or earlier, should the Chief Electoral Officer be satisfied that all the necessary preparations are in place.
Finally, Madam Chair, I would like to reiterate that our government is committed to working with all of you on the committee and with all members of the House of Commons to ensure that this legislation can be amended if it can be improved, but to ensure its passage as quickly as possible.
Madam Chair, thank you. I hope I haven't run over the time. I'm really looking forward to seeing some old friends who serve on your committee and to answering questions.
Thank you very much.
View Dominic LeBlanc Profile
Lib. (NB)
We have obviously taken note of and read carefully the court's decision. We accept the court's decision. You will note that we did not seek to appeal the court's decision, because we accept those findings.
I don't disagree with your characterization that it may have been an unfortunate circumstance. I've been a minister for five years. We receive advice from different government departments, including the Department of Justice, obviously, on highly technical legal matters. We're accountable for those decisions; it's not the public servants who offer the advice or whom we encourage to appear before committees to speak freely about their work and answer technical questions from colleague parliamentarians. We expect that to be a healthy, normal and good part of the parliamentary process, but we certainly accept responsibility for that legislative change, as you said, in Bill C-76. We thought Bill C-76 had a lot of positive improvements in terms of the Canada Elections Act, but we're happy to work with other parties to add the word “knowingly” into that particular section, which the court struck down. We accept the court's decision and we would welcome advice from colleagues as to the best way to remedy that in a legislative process.
We don't think that dragging it before the courts is the best way, but I'm not insensitive to your comment, Mr. Nater. Obviously I don't disagree with the substance of your conclusion. I regret that this was the way that this particular clause was treated by the courts, but I fully accept the decision of the justice.
View Dominic LeBlanc Profile
Lib. (NB)
I'm just glad you didn't say “omnibus”, sir.
View Dominic LeBlanc Profile
Lib. (NB)
Mr. Nater, we do recognize, as you said, that the circumstance of the Chief Justice of Canada—Chief Justice Wagner—serving as the administrator is not an ideal circumstance in the long term. At the time Madame Payette resigned, I think that I, in my enthusiasm, got ahead of myself in hoping that the process that I was a part of—the advisory committee that the Prime Minister established to look at recommending a short list of outstanding Canadians to replace Madame Payette—would have concluded earlier.
The good news, from our perspective, is that we have finished our work. The Prime Minister will have our recommendations in the next few days, and I'm hoping, like you, that all Canadians can see who Her Majesty will summon to the office of Governor General in the next few weeks. We're at the end of a process.
I found it a fascinating process. Our group had, I think, 12 meetings. We had four volunteers. The Clerk of the Privy Council and I co-chaired the group, but we had four very busy volunteers who gave us their time to consider dozens and [Technical difficulty—Editor] It was interesting and it was very valuable, and I think we've arrived at an interesting list. The Prime Minister has not made a decision yet, but I think that should be coming in the not too distant future.
I do share your concern that having the Chief Justice.... I can't imagine that we would ever put the Chief Justice or even the Governor General.... I think you talked about political games, Mr. Nater. I can't imagine that any of us would be responsible for something so shocking as political games. However, I do recognize that it's an unusual moment to have the Chief Justice serving as the administrator, so hopefully his volunteer effort to help the country in that capacity will come to a conclusion soon.
View Dominic LeBlanc Profile
Lib. (NB)
Madam Chair, I thank my friend and colleague Mr. Lauzon for his question.
I fully share his sentiment. As parliamentarians, we have the opportunity to propose temporary improvements to the Canada Elections Act at the request of the Chief Electoral Officer. It was his report to Parliament last fall that prompted the government to prepare a draft of the bill that is before you today.
I know that, as a Quebecker, he has certain concerns. In the CHSLDs, just like everywhere else in the country, we have seen some extremely difficult times in the context of the pandemic. My mother was in a nursing home in Ottawa and she died there a year and a half ago, before the pandemic. That home was one of the ones that suffered extremely painful consequences.
Like everyone else, I think, we're all concerned and we're trying to find a way for these people, who have built our country and contributed to its prosperity, to participate in the election. They should not be prevented or discouraged from voting and exercising their democratic right. They must be able to participate in the election safely.
My riding is a rural Acadian area of New Brunswick. On election day, there was a tradition. Mobile polling stations would go to a number of nursing homes—in your area they would be called CHSLDs or private homes. This allowed these folk to vote on election day. The polling station was there for an hour or two in a common room, where people went to vote. It was an enjoyable time for everyone.
In the context of COVID‑19, you don't want to move around to different long-term care homes because of the risk of infection and transmission. You can't put residents and staff in a situation that is not up to the desired health standards. The idea was to have 13 possible voting days. The chief electoral officer in each riding will contact the administrators of the CHSLDs to see how the vote can be conducted safely and with all the necessary precautions.
There's an idea I thought was great. Let's say there's an outbreak on one floor. You could have it so that only residents on that floor can vote at one polling station, and residents on other floors can vote at another. This gives a lot of flexibility. This will be done with the advice of health professionals. So we can organize the vote and not put people's lives at risk.
View Dominic LeBlanc Profile
Lib. (NB)
Thank you for your question.
Mr. Lauzon, I agree wholeheartedly that allowing greater access to voting—
View Dominic LeBlanc Profile
Lib. (NB)
It was a fascinating answer.
What's going to happen? Mr. Nater wanted to hear my detailed explanation of mail-in voting. Perhaps I'll have the chance, Madam Chair, with another colleague who will want to hear that answer.
View Dominic LeBlanc Profile
Lib. (NB)
Thank you for your question, Mr. Therrien. It's a pleasure to see you again, even if it is virtually.
Quite the contrary, we were very much aware. Privy Council staff, people in my office and I, myself, followed the committee's proceedings. We spoke with our fellow members on the committee, so we were very much abreast of what was going on. We paid close attention to what the witnesses you mentioned had to say.
We decided to bring forward a draft bill just a few days before Christmas. I say “draft” because, as we all know, in a minority Parliament, the final product is the result of consensus among members. In order to start the conversation, we thought it was appropriate to introduce a draft bill that largely took into account the recommendations that followed and the input of the witnesses, which we took note of throughout the process.
We know that the members of the committee and other members will likely propose amendments and changes. As a government, we are more than willing to listen to suggestions aimed at making the bill better or perhaps addressing certain aspects that are not sufficiently dealt with in Bill C‑19.
View Dominic LeBlanc Profile
Lib. (NB)
Madam Chair, I want to thank Mr. Therrien for his question.
I hope it was not seen as a sign of disrespect. On the contrary, as a cabinet, we made a decision to bring forward a bill.
You're right that it was introduced a few days before the Christmas break. We were hoping it would spark discussion with members of the various parties. We were expecting that, come the new year, members would have discussed the legislation we had brought forward.
As I said, we followed the committee's work closely, including the comments of the witnesses who came before the committee. For instance, we did not agree with the Chief Electoral Officer's recommendation to do away with Monday as a polling day and to limit the polling period to the weekend. We thought it was important to keep Monday. That said, we are quite open to changes that may be proposed and we are obviously eager to see how the Standing Committee on Procedure and House Affairs can improve the bill.
We are not purporting that this is the perfect bill, akin to some invisible web that cannot be changed or improved. We will obviously abide by the will of the committee and the members of the House of Commons. That is for sure.
View Dominic LeBlanc Profile
Lib. (NB)
Thank you for your question, Mr. Therrien.
Like you, I saw the evening news yesterday, and the number of cases in Quebec is way down; the situation around the country is really looking up.
Clearly, we all hope that the number of cases continues to drop, but that can change unexpectedly. Consider our friends in Manitoba, for instance. We hope that doesn't happen, of course.
We will let Elections Canada decide. We realize that the summer is fast approaching, but we hope that we can move this bill forward and that the Senate passes it before Parliament rises.
It will give the Chief Electoral Officer and Elections Canada the discretionary authority to implement the necessary measures, together with local and provincial public health authorities. We will trust Election Canada's judgment as far as implementing the measures is concerned.
We, of course, hope that the bill will pass.
Thank you, Madam Chair.
View Dominic LeBlanc Profile
Lib. (NB)
Mr. Blaikie, it's a privilege to see you in Winnipeg. You're two hours ahead of me. It is the afternoon here in Fredericton, but good morning to you, sir, in Winnipeg.
The Prime Minister has said clearly that we're not seeking an election and we're not looking for an election. We're focused, as all parliamentarians are—and as I know you, Mr. Blaikie, and your NDP caucus are—on what we can collectively do to protect Canadians during the course of the pandemic.
We think it's prudent—and I think you and I may have this in common, among [Technical difficulty—Editor]—not to be voting no confidence recklessly and often every time a confidence motion comes up. At least you have the virtue of being consistent in saying that you don't want a pandemic election and you want to focus on Canadians. That's what we've been saying. We have some colleagues who consistently and regularly vote no confidence. I've said that it's sort of like playing chicken, hoping the other person swerves.
We think it's responsible to have this legislation in place. However, as I said, we'll continue to focus on the economic recovery and the public health measures necessary for Canadians.
We have some colleagues in the House of Commons, although not in your party, Mr. Blaikie, and not in mine, who seem to want an election, who have publicly called for elections, early elections, and who regularly vote in a way that would trigger an immediate election. It's in that context that I think it's prudent to have this in place. That would be my—
View Dominic LeBlanc Profile
Lib. (NB)
Thank you, Mr. Blaikie, for the question.
Our view, I hope, is a common sense one. The idea here is to put in place the right mix of temporary measures to allow Canadians to safely vote in the context of a potential pandemic election, and obviously to provide safety for the 250,000 people who would work at the polls across the country in an election and those who volunteer.
We've taken note of public comments you've made around the campus voting program. I believe, and the government believes, that Elections Canada should reinstate a campus voting program on campuses. It will reduce pressure in other polling stations and obviously encourage younger people to vote.
I love the idea from a conversation that you and I had. In my rural riding in New Brunswick, there is a Canada Post office in every small community, some of which aren't even incorporated municipalities. I think the postmaster or the postmistress who runs that post office is in a perfect position to be able to help people—often senior citizens, as you said—without Internet access, without photocopiers or scanners at home, to properly have pieces of ID. The idea is that Elections Canada might train these people to assist people applying for special ballots, and the same thing theoretically could be true at Service Canada locations in different communities.
I am hoping that the committee in its wisdom will take a broad view. We certainly will not object to something being beyond the scope of the legislation if it's designed to further our collective best efforts to come up with right mix of measures.
I have taken note of comments you made publicly and in your speech in the House of Commons, and you have identified a number of areas where I think we should quickly work collaboratively to improve the legislation and to adopt amendments. We will continue to work with you and all colleagues on the committee to look at those very issues that you raised, particularly to see how we can make mail-in ballots accessible. I have great faith in Canadians. I don't believe there are widespread examples of electoral fraud or of people trying to cheat on mail-in ballots. I think the opposite is the case. I think they are very secure.
I would really lean on the side of accessibility, including, as you say, in filling out the name of the candidate on a ballot. I voted for myself in a hospital in Montreal in the last election. I knew how to spell my own name, but I'm not sure that some people who wanted to vote for me might have got it exactly right. I think we have to think of flexible common sense ways to ensure that we can do that properly.
Thanks. I just wanted to get that corny line in, Madam Chair.
Did you feel sorry for me because I was—
View Dominic LeBlanc Profile
Lib. (NB)
My wife voted in the hospital room with me, so I knew I had two votes.
View Dominic LeBlanc Profile
Lib. (NB)
I have seen a number of elections, as I am sure many colleagues have. You're right that if it's the Thanksgiving Monday.... I think we voted on a Tuesday in an election when I was a candidate precisely because Thanksgiving Day was a holiday on a Monday. However, we didn't have the circumstances you described. Our legislation prescribes a three-day polling period finishing on a Monday, but I would think it would be far from ideal, as you say, to run over a statutory holiday in that three-day period. We don't have that many long weekends in a year.
However, I'd be happy to get a technical answer from Al Sutherland, if you want, who is listening now—
View Dominic LeBlanc Profile
Lib. (NB)
Otherwise, not to cost you your time, we can get back to you in writing with a specific answer to that technical question, if it's helpful for the committee.
View Dominic LeBlanc Profile
Lib. (NB)
I'm going to ask Al Sutherland, assistant secretary to the cabinet, who is joining us, to confirm this. He can correct me.
It is the Prime Minister, I think, who has, within the legislation.... When he asks the Governor General for the writ, the Prime Minister I think has the discretion to suggest the length of the writ within the parameters of the legislation. I remember that in 2015 Mr. Harper called a 79-day election—
View Dominic LeBlanc Profile
Lib. (NB)
Sure. Of course.
View Dominic LeBlanc Profile
Lib. (NB)
Al, can you clarify that to make sure I haven't screwed it up?
Allen Sutherland
View Allen Sutherland Profile
Allen Sutherland
2021-06-10 11:50
No, you didn't screw it up, sir, but it's on advice of the Prime Minister. It's the Governor General's decision, ultimately.
View Dominic LeBlanc Profile
Lib. (NB)
Again, Ms. Vecchio, thank you for the question.
I certainly share your concern in terms of what we can all do, both as elected parliamentarians and as citizens in general, to increase public confidence in the electoral process. The Premier of Newfound and Labrador has been a long-time friend of mine. During that unprecedented circumstance, as you noted, 11 hours before the voting was to begin, the chief electoral officer in that province, because of a sharp increase in COVID cases driven by variants, kept pushing out the election day, and it went to literally all mail-in ballots. The turnout was historically low, I think, in that election, which is not something that any of us would want to see.
That's why we believe this piece of legislation is part of the answer. It's by no means the only answer or perfect answer, but things like making mail-in ballots more accessible, things like allowing nursing homes to vote—
Ms Karen Vecchio: Mr. LeBlanc—
Hon. Dominic LeBlanc: —we think are part of the answer.
View Dominic LeBlanc Profile
Lib. (NB)
I don't want to pretend that I can table a conversation I had—
Ms. Karen Vecchio: That's okay—
Hon. Dominic LeBlanc: —on a text or on the telephone with the premier, but—
View Dominic LeBlanc Profile
Lib. (NB)
—what we can do....
Much of it may just have been foolish exchanges, because he's been a long-time buddy of mine, but what I'll be happy to do is ask Al Sutherland and Manon to ensure that any of the documents that we prepared in the context of working on this legislation, background documents or stuff that we may have received from Elections Canada, or anything that's appropriate, will be sent to the committee .
View Dominic LeBlanc Profile
Lib. (NB)
Madam Chair, I heard the question clearly. In the interest of time, if you're okay, I'm prepared to answer.
Justin Vaive
View Justin Vaive Profile
Justin Vaive
2021-06-10 11:55
Yes, Madam Chair, we did.
View Dominic LeBlanc Profile
Lib. (NB)
Thank you. It was nice to see Ms. May on the screen for a minute.
Mr. Turnbull, thank you for the question.
You're right. I think there has been some confusion—that might be the generous word for it—around the intention or the legal reality of these measures being temporary one-off measures for a potential election during a pandemic.
The Chief Electoral Officer was very clear. The suggestions he made in his report to Parliament last fall spoke of temporary changes that would sunset after the next election, should there be one in the context of a pandemic, or at a time where he concludes, based on the advice of the chief public health officer for Canada, that these measures are no longer required.
It is a technical question. I want Mr. Sutherland to ensure he can give the committee the very technical answer on why these provisions are not permanent. Mr. Turnbull, you raised an issue that's of legitimate concern.
Al, can you perhaps help Mr. Turnbull?
Allen Sutherland
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Allen Sutherland
2021-06-10 11:56
Yes. I will have to do it without reference to the document, because of the challenges.
As Minister LeBlanc set out in his opening remarks, the legislation is temporary. The CEO can bring it to conclusion by simply providing notice in the Canada Gazette that the pandemic conditions no longer apply. If he does that without reference to a date, it's six months later, or he can do it with reference to a date, which could conceivably bring immediate termination to the application of the legislation.
Now, as Minister LeBlanc set out in his opening remarks, the CEO is required to consult with the chief public health officer—with Dr. Tam—and needs to be able to reach a conclusion that the pandemic conditions no longer apply. The legislation would then be null and void.
View Dominic LeBlanc Profile
Lib. (NB)
Mr. Turnbull, thank you for that question.
I said this in my opening remarks, and I think Mr. Therrien alluded to it as well. We saw in British Columbia a sharp increase in the number of mail-in ballots in that provincial general election. British Columbia is a big province with large urban centres and disparate rural communities. There was a sharp increase in mail-in ballots. The same thing, of course, was true in the United States in the presidential elections held last fall.
We thought that one of the challenges—and I noticed it when I was doing my own mail-in ballot in 2019—was that I had to literally photocopy pieces of a driver's licence and a medicare card to show residency, and then follow the rules and mail it to the chief returning officer in my constituency. At that point he returned the voting kit to me by mail. I completed it and put the different sealed envelopes together. I properly voted for myself and then I returned the ballot to him.
It struck me that if you were a senior citizen.... I was lucky that I had people who could help me get the paperwork done. I think we can collectively think of ways to make it more accessible while still keeping it secure.
View Dominic LeBlanc Profile
Lib. (NB)
Thank you, Madam Chair.
View Dominic LeBlanc Profile
Lib. (NB)
That's a very good technical question.
What we are proposing is broadening the discretionary authority of the Chief Electoral Officer so he can amend or adapt the provisions of the existing act to protect the health and safety of voters and polling staff. As I understand it, if the Chief Electoral Officer determines that a measure is not needed in a given region or for a particular reason, we will trust his judgment. I can follow up with a more detailed answer, if you like.
View Dominic LeBlanc Profile
Lib. (NB)
I don't want to mislead you. I see that Mr. Sutherland is taking notes right now. As far as I know, the answer is yes. I am not sure whether it is on an à-la-carte basis, so to speak, but for voting by mail, we expect that Elections Canada will put certain measures in place. I will follow up shortly with a more detailed answer.
Thank you for your question.
View Dominic LeBlanc Profile
Lib. (NB)
No. I hope I didn't give that impression. That said, I can see how some voters might have religious obligations on the weekend, but not on Monday.
In my riding, voters who come to mind are those whose employers allow them to take a certain amount of time off in order to vote on election day. By law, employers have to give employees time off so they can vote. In addition, day care centres are open on Monday and not on the weekend. Monday was included as one of the three polling days for other reasons as well. In some regions, public transit runs more often on Monday with reduced service on the weekend.
That is why we are keeping Monday as one of the three polling days.
View Dominic LeBlanc Profile
Lib. (NB)
Thank you, Mr. Blaikie, for the question.
I have had in my other responsibilities ongoing conversations with the government representative in the Senate, Senator Gold. At the end of a session there are typically a number of important pieces of government legislation. These include the budget implementation act and the net-zero accountability act, which is obviously important, I know, to your party and certainly to our government. We very much want the Senate to be in a position to study and adopt those bills. We want to see those bills, just as an example, get royal assent.
We feel the same way about this piece of legislation. I've expressed that to Senator Gold. I would hope that our colleagues in the Senate, who provide a very useful and in many cases a thorough study of legislation, may understand that these are time-limited measures designed specifically to protect Canadians in the context of a potential pandemic election and will find a way to do their work on an expedited basis and adopt this bill. We won't know, obviously, until that happens.
However, the minute this clears the House of Commons, Mr. Blaikie, I will be doing what I can with colleagues in the Senate, including experienced senators who have offered to sponsor this bill in the Senate. I would hope they'd recognize that this is an unusual circumstance and that the bill speaks to the electoral system, which is obviously of great interest to parliamentarians in the House of Commons, and that they could accommodate us, particularly if we arrive at a broad consensus in our House.
View Dominic LeBlanc Profile
Lib. (NB)
Madam Chair, thank you.
Thank you to colleagues for this opportunity, and thank you to Al and Manon for joining us. I hope to see you again soon.
Mark Schaan
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Mark Schaan
2021-06-10 11:09
You bet. I'm happy to start, and then I may have some supplemental information from my colleague, Mr. Morrison.
Essentially, the issue we're talking about with respect to unfunded pension liabilities relates to corporations that have defined benefit pension plans. Just by way of quick reference, there are a number of ways in which companies provide additional retirement benefits to their employees, or future promises of income in retirement. Sometimes they're as simple as supporting individual employees in making their own contributions through things like RRSPs or other savings plans—a defined contribution mechanism.
What a defined contribution mechanism means is that in a pension plan that essentially says that the employee, perhaps, but often the employer, will make a contribution into a pension plan, the contribution is what is defined; that is, the employer will make a set contribution on every pay, which will then go into a fund. That fund will be invested with some sort of investment scheme, and whatever that investment scheme is able to ultimately provide is what will be made available to the individual at the time of their retirement.
A defined benefit pension plan, however, is one where the benefit is that which is defined, which is to say that a promise is made that upon retirement an employee will receive a percentage, usually, of their pre-retirement income, often with some sort of formula based on best years, which indicates that it will be paid in perpetuity until such time as their death.
What we're talking about is companies that offer this type of pension plan. That number has largely been going down. I don't have the exact figures in front of me, but when I'm done explaining I'll see if Mr. Morrison has information. Essentially, that number is relatively small, because it is a higher-risk mechanism of providing retirement income. Ultimately, the employer is hoping that investment returns will allow them to be able to continue to offer that benefit based on the full lifespan of their employee base.
Where we have an unfunded pension liability is essentially the differential between that which was promised and that which is required. That, we calculate in two ways. One is on a going-concern basis. In a defined benefit that means, are you actually earning enough from your investment returns and your ongoing cash requirements to be able to provide for the requirements of your pensioners at the time of their retirement? Right now, if I have 10 employees and I have five retirees, am I actually earning enough on the basis of what I have in my pension fund to be able to provide that?
Then there's also a wind-up basis, essentially. Is there enough, should the company actually go insolvent, to be able to meet the promises it made to all of its employees? That wind-up basis is a much bigger number, obviously, because you need to have enough in your account that if you were to go insolvent you would be able to pay out those promises.
The vast majority of defined benefit pension plans that are currently available in Canada are actually provincially regulated, because they are provincially regulated industries. The requirements for plan sponsors as to the amount they need to have in place vary enormously, everything from the Quebec government, which actually does not require a solvency basis accounting—so they do not require pension plans to account for what would be required if they went to insolvency—all the way through to the federal government, where we actually require plans to be 100% funded on a wind-up basis or on a solvency basis—
Mark Schaan
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Mark Schaan
2021-06-10 11:13
My information is that as of 2019 there were 4.3 million workers in total that were members of defined benefit pension plans. For federally regulated plans, those are, as I said, held at 100% solvency requirements. They then have to make up the difference between that which they have and that which would be required on a solvency or wind-up basis over five years—
Mark Schaan
View Mark Schaan Profile
Mark Schaan
2021-06-10 11:14
Yes, of whom 1.2 million, Mr. Jowhari, are in the private sector. The vast majority of those are actually in the public sector. In the private sector, 1.2 million have access to a defined benefit pension plan.
Mark Schaan
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Mark Schaan
2021-06-10 11:15
That I would not have at the ready, because, obviously, those plans vary enormously in size.
To your earlier point, it is mostly larger employers that have defined benefit pension plans, although there are some organizations that offer only defined benefit pension plans, for instance, for their senior executives, so that—
Mark Schaan
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Mark Schaan
2021-06-10 11:16
This would provide a superpriority for the unfunded pension liability, and essentially that unfunded pension liability varies enormously, depending on the plan, depending on the company and depending on the particular facts. In some cases it can be very large.
In certain provinces where, for instance, a plan is held to having, in assets, only 85% of the value of the plan on a wind-up basis, you could then have as much as or more than 15% of the total value of the plan. For very large employers, we can look at some of those that have been through a CCAA process. For instance, in Stelco there were 20,000 pensioners, and that can end up being an awful lot of money and an awful lot of people.
In some of these cases—in the case of Air Canada, for instance—we've seen that the unfunded pension liability at the entry into their restructuring was very significant. If that had been in place, if there had been a superpriority at the time, it would potentially have dwarfed all the other available creditors and prevented a restructuring.
Mark Schaan
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Mark Schaan
2021-06-10 11:18
On the degree of risk, I'll come at this in two ways. The degree of risk varies, as I said, depending on the regulation that the pension plan itself is subject to. Obviously, if the pension plan isn't required to be fully funded on a solvency basis, that creates greater risk for workers, because there's not enough that's actually being held in assets to be able to make those payouts in the case of an insolvency.
Where those pension regulations are stronger and require greater degrees of funding, that obviously places less risk on the employee in that case.
Your question, though, is in terms of where the risks would go with a superpriority and what the potential impacts would be.
If there was a superpriority, the theory is obviously there's less risk for workers, because they will be paid first, so that unfunded pension liability would be there. In some cases, though, that unfunded pension liability actually would still not be fully serviced by the assets on hand of the organization. In one of the insolvencies that covered over 24,000 pensioners that went through in 2004, the unfunded pension liability in that case was $1.8 billion. That would have significantly dwarfed the assets that were on hand of the individuals, so they still wouldn't have been fully paid, even with a superpriority.
However, because there wasn't a superpriority, that restructuring ultimately brought all of the other creditors to bear, and that entity was able to restructure and allow for those 24,000 pensioners to emerge into a viable entity that could still continue to make pension contributions and ultimately pay out pensions.
If you're a lending institution and there's a superpriority in place, it means that superpriority gets paid out before you do as a secured creditor. There's a couple of potential behaviours that you would keep in mind to ensure that you'd mitigated your potential risk.
One is, obviously, that you potentially charge a higher premium to the cost of credit, because now there's a possibility that you will not actually be paid on a secured basis because there's someone who ranks above you in—
Mark Schaan
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Mark Schaan
2021-06-10 11:22
That's called an actuarial evaluation. An actuarial evaluation is required under federal pension regulations on an annual basis where you are less than 100% solvent on a wind-up basis.
That actually does continue to calculate the unfunded pension liability and then requires special payment. We actually require the gap between a fully-funded pension on a solvency basis and that which is within the account to be paid through special payments over the course of the subsequent five years.
We then require—
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Mark Schaan
2021-06-10 11:22
The concern is that they may know what that unfunded pension liability is, but if that unfunded pension liability is going to be paid ahead of them in an insolvency, that obviously creates increased risk for their ability to be paid back, which means they're going to calculate that into the risk premium they charge, or they won't lend at all.
One of the other fears we have is if there actually is an unfunded pension liability and there is a superpriority for that, one of the potential strategic behaviours that might actually come from lenders is not to assert pressure on the company to fully fund their pension, which is what some people theoretically imagine would happen, especially since that often would mean that you'd be taking it out of working capital, but instead that those lenders will call their loans, and they'll call their loans early to ensure that they get paid, therefore putting the company into liquidation.
Mark Schaan
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Mark Schaan
2021-06-10 11:23
Clause 1 creates the superpriority for unfunded pension liabilities in Bankruptcy and Insolvency Act restructuring. Essentially, what happens right now is that unfunded pension liabilities are treated as unsecured creditors alongside other unsecured creditors, like small and medium-sized enterprises and other suppliers that have aided with and provided services that have yet to be paid for by the organization.
In the current scheme, superpriorities are afforded in a couple of categories. First of all, we provide a superpriority for unpaid wages, up to a cap of $2,000. We also provide for a superpriority for unpaid payroll taxes—employment insurance and CPP. That's to ensure that employees can actually get their last bit of pay and that doesn't actually go unpaid. We actually have a program federally that doesn't even require the employee to participate in the insolvency process. We take their spot in the insolvency through the wage earner protection program and provide that piece for them.
We then have preferred claims. Preferred claims are relatively rare. There are a small number of them. They exist in a couple of instances.
Next there are secured creditors, which are those who actually lent on the basis that they were insured against assets and that those assets would be utilized to provide them with the security of their loans, and then there are unsecured creditors. In this particular case, they would take that unfunded pension liability in their restructuring and provide for it at the same level at that very early stage. As we've indicated, in certain situations that can actually wipe out available assets for other sources of creditors, or other scales of creditors, and potentially prevent a restructuring from existing.
Mark Schaan
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Mark Schaan
2021-06-10 11:28
One thing that's important to note at the outset is that pension funds are held in trust and are sacrosanct. They cannot be used for alternative purposes. That's true both for defined contribution pension plans and for defined benefit pension plans. When a company is taking a pension contribution off every paycheque, it's going into a dedicated account that actually continues to accrue value through the investment scheme that it's put through.
In the case of a defined benefit pension plan, whatever is in the plan is absolutely sacrosanct, as we indicated. It can't be used for other purposes. In the case of a defined contribution plan, that means that essentially the risk is being shared between the employer and the employee, so in an insolvency what is available to the individual employee is whatever was invested to date.
There isn't an unfunded portion, because essentially the way that a defined contribution plan works is that the contribution has been defined; it has been made every single time and, as we indicated, any unfunded pension contributions for the previous period of work need to be remitted as a superpriority, so whatever is in that fund is available and then gets distributed. Normally that happens as a purchase of annuities.
There are some mechanisms that have existed in a couple of insolvencies where potentially they've been allowed to be converted into other investment-accruing vehicles, but essentially, for a defined contribution plan, you have very strong protections in place, because there wasn't any expectation other than the fact that the market would return what the market returned. In the case of a defined benefit plan, that's not the case, obviously, because what was defined was the benefit, and that requires a certain level of market return to be able to get to that level.
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Mark Schaan
2021-06-10 11:30
No. This bill is aimed at a couple of elements. It's aimed at unfunded pension liabilities; it's aimed at terminated group insurance plans and it's aimed at severance pay. Defined contribution plans aren't treated under this bill, because essentially a defined contribution already has a superpriority for any unremitted payments into the plan for that last little period leading up to the insolvency. Then, as I said, it's subject to the vagaries of the market—in terms of investment returns—as to what ultimately those individuals will receive upon retirement.
Mark Schaan
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Mark Schaan
2021-06-10 11:31
I won't presume to speak for the provincial approach to pension regulation. I can say why we've approached it the way we have at the federal level. We believe pension funds ultimately should be 100% funded on an insolvency basis because we see real risks: Insolvencies can't necessarily be fully predicted. By requiring plan sponsors to be at 100% funding, we anticipate and allow for the possibility that the firm might ultimately go insolvent, and that therefore there are sufficient funds in place to allow for the promise they've made.
For provinces that don't require that level of funding, we didn't introduce that at the federal level, in part because we thought it introduced significant undue risk to workers and pensioners. It raised the possibility that you could have an insolvency that would lead to an unfunded pension liability of a significant nature.
We see real value in solving the problems of unfunded pension liabilities while the firm is actually in a position to be able to address them—that is, while they're operating and ongoing. Doing it in the case of an insolvency is extraordinarily difficult. By definition, there are insufficient funds to be able to pay those to whom there are obligations. Therefore, you are then ultimately making strategic decisions and policy mandate decisions about who should be paid and in what regard.
We also wanted to be mindful of the fact that we are very supportive of the desire for incentive to restructure and allow for entities to emerge as a going concern and continue to make the contributions that ultimately will lead to greater security.
Mark Schaan
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Mark Schaan
2021-06-10 11:34
You ask an important question. Essentially, we see it as deferred compensation, not necessarily wages. We see compensation as a promise made in a way similar to the promises made by that same organization in a number of different domains. The promise, upon receipt of a service, to pay for that service is also akin to that, which is where you find other unsecured creditors.
In an insolvency process we need to be able to look at all those who, essentially, have IOUs and promises held, and figure out a mechanism by which to provide for an orderly treatment of those. While we've deemed what's in the fund as absolutely sacrosanct, what is not in the fund is held to be akin to that, which is other creditors and their unpaid bills as well.
Mark Schaan
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Mark Schaan
2021-06-10 11:35
I'm not sure I follow the second half of that.
Mark Schaan
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Mark Schaan
2021-06-10 11:35
Yes. The regulatory obligation is to be at 100% funding on a wind-up basis. However, when that is not the case, we require special payments to be made over the course of the subsequent five years to be able to make up that gap.
While there is a 100% requirement, not all pension funds are going to be at 100% on a wind-up basis at all given moments.
Mark Schaan
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Mark Schaan
2021-06-10 11:36
We see strong funding levels within pensions as an important parameter to ensure the continued vitality of the promise. We then treat the missing portion, essentially, as a creditor alongside other classes of creditors in the case of an insolvency.
The goal of the policy is strong, well-funded pensions. The reality of an unfunded pension liability in insolvency is that it's an unfunded credit that needs to be paid, and it needs to be paid alongside the other creditors.
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Mark Schaan
2021-06-10 12:25
Yes. I think our view is that the moment at which it is most easy to influence the security of pensions is when the firm is up and running and operational. That's why we require firms, while operational, to be dedicating capital towards the requirements of their pension obligations.
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Mark Schaan
2021-06-10 12:26
Yes, we think there are unintended economic consequences that come to bear as a function of a superpriority. One is a heightened cost of credit. The second is an incapacity for companies to continue to operate. The third is that, if it were to come to pass in the choice between a liquidation or a restructuring, it potentially would tilt the balance towards a liquidation, because there would be a pursuit by creditors of as much security of their owed capital as possible.
Mark Schaan
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Mark Schaan
2021-06-10 12:29
Just the last little bit of it. I think the premise of your question was—
Mark Schaan
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Mark Schaan
2021-06-10 12:29
I guess I'd offer a few thoughts on that. One is that one of the goals of having as few rules in place at the time of restructuring.... Well, I'll put it this way. A CCAA restructuring has a number of guardrails and safeguards put in place to ensure the preservation of a fair process that has integrity for all participants.
One of the premises of it, though, is that we walk in with a relatively blank slate to try to encourage an outcome that will ultimately allow for the company to emerge. We don't predetermine in the restructuring process who has an advantage, because at the end of the day, the restructuring is ultimately what's better for everybody. We don't put in place a significant number of impediments to that; we look for parties to come together for creative solutions.
The protection that's afforded to pensioners, to other members and to other unsecured creditors is essentially the mechanism by which you have to achieve to be able to get out of the restructuring, and that is that 50% of the total number of creditors in every class needs to approve the ultimate settlement agreement, and two-thirds of the value of each creditor class need to approve the restructuring agreement as well.
That is the fundamental preservation of the integrity, so we give everybody leverage, including for an unfunded pension liability. It's a very significant leverage, because if that's a very large, unfunded liability, that's a very significant portion of their class, which means that they carry weight in articulating the restructured outcome.
One of the challenges is, if you put that in place at the front and say, “Hey, guys, I hold all of the cards. I'd rather come through a restructuring perspective, but I could also just walk away right now and get paid,” the assumption that it will somehow lead to other, better outcomes, presumes that they will seek that restructured entity, and we have to remember that there are very different interests even within that class. You have active workers, who have an unfunded pension liability for continued capacity for their retirement security in the future, and you have existing retirees with varying degrees of life expectancy that's to be proved. Obviously, their negotiating position and their desire for payment now versus payment of a restructured entity are highly varied.
I would simply suggest that the theory here suggests that they always have the capacity to be 100% paid and that they'll use that appropriately. If it ends up that they just want a liquidation, that's okay, but if they want a full restructuring, we also need to think about those unintended consequences.
As to your point earlier about the fact that you weren't necessarily concerned about access to credit, one of the things that we have to recognize is that access to credit is what allows for the working capital that allows for this organization to continue to be operational and make pension obligation contributions. That access to capital and the cost of that capital factors in to the capacity of the entity to be able to continue to run, make profit, and then ultimately make determinations of payments into their pension plan.
Mark Schaan
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Mark Schaan
2021-06-10 12:34
There are a number of considerations that are both fact-specific and recommendation-specific. Is it a capped superpriority? Is it a capped preferred claim? For some of the considerations around international, I think it's worth noting that no one has a superpriority. No other country in the world has a superpriority, so to the questions earlier about competitiveness, we actually have a superpriority for unfunded pension contributions that were due off employment from their most recent wages. We don't have a superpriority for unfunded pension liabilities. It is worth noting that the recognition of international examples is that no one actually has such a system. There are some that have looked at some of these preferred claims.
On the questions of caps, again, it would depend on whether you're talking about a capped superpriority or a capped preferred claim, and on whether or not that would be a capped claim in restructuring or a capped claim in insolvency. Those have very different functions, as indicated. If there's a capped preferred claim in restructuring, it would still rank below secured creditors in an insolvency, which would prompt secured creditors to potentially seek a liquidation to ensure they had greater access to their assets.
It's also worth noting that in some cases even a capped claim potentially has two consequences. One is whether or not it would still have the capacity to scupper the chances of a restructuring. In a given example, if we look at a recent restructuring of a steel company, a capped preferred claim for unfunded pension liabilities when there are 20,000 pensioners, even at $20,000 per pensioner, would still result in significant losses for pensioners.
In that example, 20,000 pensioners would have a claim of $400 million. The capped preferred claim would likely have to be paid as part of the CCAA restructuring plan to be effective, because otherwise, essentially, we're going to prompt the insolvency, as we indicated. Secured creditors would have no reason to support a CCAA plan that would pay unfunded liability in full and reduce their potential recovery. In this particular case, the liquidation value of the entire entity was $400 million. Secured creditors would prefer a BIA liquidation that would pay secured claims first.
The capped preferred claim could result in some recovery for pensioners after secured claims, but the loss would be very significant. In this particular instance, what we ended up seeing was actually a restructured entity with a continued going concern company that was making pension obligations.
I'd have to see very specifically what the proposal on caps was and how exactly it was noted. I'll just note that caps themselves don't necessarily take away from some of the theoretical considerations, as well as real-life considerations around whether or not they will still lead to liquidations and not restructurings, increase the cost of capital and see more entities potentially fail to survive and therefore actually place pensioners and workers at risk.
Mark Schaan
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Mark Schaan
2021-06-10 12:39
Thank you for your question.
Regarding the first question, it's difficult to compare this bill to past bills. However, what sets it apart is some innovative aspects.
I'll continue in English, because there are technical terms.
Mark Schaan
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Mark Schaan
2021-06-10 12:39
This one has a few interesting pieces to it. One is that it has a superpriority for pensions, but it also has a preferred claim for terminated group insurance plans. It has a preferred claim for severance pay in BIA liquidations, which is also relatively novel. It has some aspects that go beyond what some other bills have aimed to do, in the sense that it has a very wide definition of, potentially, employee pay, which would include, for instance, executive bonuses and a number of other zones that potentially are different from previous attempts in this space.
As I said, I'm not one to compare, and I can't speak from a government perspective or a public service perspective. I can just say that the consideration we have here is that our goal is to return as much value back to workers and the economy as possible. We think the strongest way to do that is to ensure that as many businesses as possible, where possible, continue operations and continue to offer their pension plan. We see real risks in this bill to the capacity to be able to do that.
If it wasn't for the fact that we've seen strong restructuring that has actually allowed for pensions to be able to continue.... I can look to a number of recent examples. We have now a well-funded Air Canada pension plan as a function of restructuring, which has allowed for that pension to continue to be open and providing for its workers. Some of the potentials of that, given the unfunded pension liability at the time of its restructuring, may have actually resulted in a liquidation. We've seen that in a couple of other zones, like Stelco. This is the challenge.
Could you repeat your second question?
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