OTTAWA - The federal government will have to improve the service it provides Canadian business and consumers or pay back some of the billions of dollars a year it collects in fees, under a bill passed by the House of Commons yesterday.

"This bill is more significant than many measures in the budget," said Jay Myers, executive vice-president of Canadian Manufacturers and Exporters. "It's been a sleeper but the potential impact is huge."
The government collects an estimated $4-billion a year in user fees, for everything from processing passport applications to evaluating new veterinary drugs. Half that is estimated to come from businesses. Most departments and agencies promise to meet performance standards in return, but often do not.

In one example, the government said when it began to collect fees to test animal vaccines that it would reduce the average evaluation time to 180 days from 400. It now takes an average of 960 days, Mr. Myers said.
"These are problems that exist across all departments," Mr. Myers said.

Legislation championed by Roy Cullen, a Toronto-area Liberal MP, aims to change that. For the first time, it will force departments to benchmark their fees and performance promises against those of Canada's trading partners, and make departments rebate some of the money they collect if they don't meet those promises.

Drug companies, for instance, can pay $1-million to get a single drug approved, and approval times there are twice the international norm.

Government officials, who tried to stop the bill until recently, warned it could cost the treasury $2-billion. Of course, that would assume the government could not meet a single standard and lost every penny of fees from business.
Most businesses would rather see the standards improve than get the money back, but the potential to save money is also there, Mr. Myers said.

"There will be substantial savings if government can't deliver what it is supposed to."

The government got into what it calls "cost recovery" for many services in the mid-1990s as it combatted the deficit, but at the same time laid off thousands of workers, causing service standards to drop.

For Mr. Cullen, the bill's passage is a personal victory. He first introduced it over three years ago, and private member's bills like his have only a one in a thousand chance of passing. The government fought against the bill until Paul Martin became Prime Minister, but Mr. Cullen was supported by backbench MPs.

He began work on the bill after two companies in his riding, Bayer and BASF, complained about the time it took to get new chemicals approved. They said the fees they paid to government were equal to what other countries charged, but the turnaround on approvals was much slower.

Companies can't go elsewhere for the service, and could only appeal to the people who provided the service in the first place. The bill sets up an independent arbitrator to deal with disputes between government and business or individuals. As well, proposals for any new or increased fees will have to be tabled in Parliament, where they will be subject to scrutiny from MPs.

"We're going to end up with performance standards being met in many, many more cases," Mr. Cullen said.

"It will make government more accountable," Mr. Myers added. "When you think about it, why should someone pay for something that isn't delivered?"