Madame Chair and members of the committee, I am very pleased to have this opportunity to present to this House my private member’s bill – Bill C-212, An Act respecting user fees. The intent of this legislation is to bring greater transparency and accountability and parliamentary oversight to federal government departments and agencies when they attempt to recover costs through user fees.

User fees take many different forms and are meant to defray some or all of the costs of a service provided by government presumably in the public interest, but which also provides a specific service to the client (for example license fees, registrations, etc.)

At the outset I should say that I support the government’s objective to recover costs through user fees for private goods or proprietary services. What my Bill addresses, are the following concerns –

• The need for a greater role for parliamentarians when user fees are introduced or increased;
• The need for meaningful stakeholder participation in the fee-setting process;
• Improved linkages between user fees, and federal department and agency performance specifications and standards;
• The requirement for more comprehensive stakeholder impact and competitiveness analysis when new user fees, or fee increases, are contemplated;
• The goal of increased transparency with respect to why fees are applicable, what fees are charged, what costs are identified as recoverable, and whether performance standards are being met;
• The need for an independent dispute resolution process to address the complaints or grievances of the payers of user fees; and,
• The need for an annual report outlining all user fees in effect that would be tabled in the House of Commons, and referred to the appropriate Committee of the House (Finance).

Madame Chair, our government has embarked on a very ambitious innovation agenda. We need to ensure that our regulatory environment supports and encourages this very important objective. The government recognized this connection when it launched the Smart Regulation initiative in the recent Throne Speech. The government announced that it will "move forward with a smart regulation strategy to accelerate reforms in key areas to promote health and sustainability, to contribute to innovation and economic growth, and to reduce the administrative burden on business."

I would suggest to you that the government’s current cost recovery user fee policy runs counter to the innovation agenda and should be a major part of the smart regulation initiative. Bill C-212 does just that, in my view.

It is time for parliamentarians to take greater ownership of user fees. What began as a legitimate attempt to more fully recover costs for proprietary services has developed into something that is beyond that which was contemplated. User fees currently bring in $4 billion annually in revenues for the federal government.

I was very pleased to see a reference to User Charging and Cost Recovery referred to in our Finance Minister’s February 18^th 2003 Budget – in his budget speech and in the budget documents. In the Budget Plan, the government reaffirmed its commitment to bring in a revised policy on external charging focused in improved management practices. The government stated "This new Treasury Board policy will highlight the importance of consultation, service delivery and results in all user charging activities ranging from optional to regulated services. Enhanced implementation requirements, including the annual reporting of revenue and performance information directly to stakeholders and Parliament, underscore the significance of parliamentary oversight and ministerial accountability. Departments will be required to assess the performance and related cost implications associated with the revised policy and to engage their stakeholders on how best to achieve its objectives."

These are good words and very encouraging. As the saying goes, "The devil is in the detail!" I am quite sure that the Treasury Board’s proposed new policy does not go as far as my Bill; however, having said that I have worked closely with the government to try to reach a reasonable compromise. I am anxious to see what changes the Minister is prepared to commit to.

Before I expand on what exactly my Bill does and the other proposals that are being discussed, I would like to give you an overview of the eleven amendments that I have tabled after listening to you, to users and to the government.

Given the concern of some that the Bill interferes in roles, responsibilities and the mandate of the Executive Branch of Government, I have proposed an amendment to provide Ministers and heads of other authorities the ability to introduce user fees (like the airport security fee introduced following the events of Sept. 11, 2001) without a prior reference to the House of Commons in the first instance where matters of national defense, national security or other emergencies are involved. This same user fee, however, would be referred to the House of Commons within one year from the date of its implementation at which time the normal application of this Bill applies. The House of Commons could then ratify the fee, propose changes to the fee, or reject the fee.

While this measure allows the Executive Branch to act in emergencies, any other new user fee or user fee increase should be part of an authority’s planning process and subject to normal lead times for consultation/approvals, etc.

Now, let me describe how Bill C-212 will spring into action when a federal government department or agency wishes to introduce a new user fee, or implement an increase in an existing fee.

The appropriate Minister will table in the House of Commons a report, which will describe the fee, the benefit conferred on users, the costs associated with the fee and all the other requirements laid out in Bill C-212. This will include how the fee compares with those in countries that are our major trading partners; what form the consultation process with users took and how users are responding to the fee or fee increase; what competitive issues arise, if any; whether or not the independent dispute resolution process has been necessary, and if so what conclusion the independent adjudicator arrived at; what performance standard the department or agency is committing to and what their track record has been in meeting performance standards in the past.

The House of Commons would refer this user fee proposal to a relevant committee of the House. The Committee might decide to review it and report back to the House. If the Committee recommended changes to the fee proposal, or rejection of the fee outright, the Department or Agency could not implement the fee as presented unless a motion to override the recommendations of the Commons Committee was introduced and passed by the House of Commons.

I should say that this power is very similar to that of the Standing Joint Committee for the Scrutiny of Regulations in the case of strictly regulatory matters. This Committee has the power to initiate the revocation of a statutory instrument. Bill C-212 is asking for these same powers for parliamentarians in respect of user fees.

In a few minutes you will be hearing from the Treasury Board Secretariat with respect to their new proposed external charging policies. I say proposed policies because they are draft policies only and have not yet been agreed to by the government.

If these proposals are accepted, there will be positive progress in improving the policy in the areas of performance standard setting, and in providing greater transparency and accountability. There appears also to be an improved emphasis on benefit/cost analysis.

Notwithstanding these developments, I still have major concerns that the new policy proposals will not necessarily lead to better results, for reasons, which I will outline in a moment. I believe the policy is also seriously lacking because it does not provide parliament with any real role.

The following are the comments on the proposed new policy–

• While I was pleased to note that the Treasury Board Secretariat will provide resources to monitor compliance with the policy, there are no apparent consequences should departments or agencies fail to meet stated performance targets;
• It is unclear whether or not these monitoring resources will be sufficient to meet the indicated mandate;
• While the Dispute Management process that is proposed may be an improvement over the existing policy, the process is still an internal one which may lack objectivity;
• There is no assurance that a substantial and complete consultation with stakeholders will occur, and that the proposed fees will be competitive with Canada’s major trading partners;
• The proposed new policy fails to clarify what is a public and what is a private good or service, and how full costing will be defined and implemented.

Many of the above concerns would be addressed if there was a stronger role for parliament. This would provide greater transparency and public debate. I stand ready to moderate the extent of parliamentary oversight that Bill C-212 contemplates to reduce any excessive, redundant, unworkable or inappropriate work by Members of Parliament; however, I will argue strenuously for a much greater role for MP’s that is implicit in the proposed policy.

I believe the need for a greater role for parliamentarians in the setting of user fees is justified on three counts –

1. user fees, while not taxes per se, are very much like taxes;
2. user fees are priced by monopolies; and finally,
3. the current system for establishing and increasing user fees is not working.

Now some will argue for other alternative ways and means for improving the user fee process. Let me describe the ones that I am aware of briefly –

1. the government may be prepared to expand the use of the Departmental Performance Reports and Reports on Plans & Priorities to enhance the role for parliamentarians in the pre-consultation, consultation and approval and implementation phases of user fees. I applaud the government if they are prepared to do this and I look forward to hearing the Minister’s views on this topic. My Bill goes further, however, in granting parliamentarians with a veto power should fee proposals not meet the criteria as spelled out in Bill

C-212 – and in particular if the proposing Department or Agency has not demonstrated a serious commitment to meeting agreed-to performance standards.

2. Some may argue that the Standing Joint Committee for the Scrutiny of Regulations should review all user fee proposals. While I like the power that this committee has to initiate the revocation of a statutory instrument, I don’t believe this committee is the appropriate committee to deal with user fees. The issues associated with user fees are not legal ones, they are economic in nature and relate to program delivery and competitiveness. This requires a different set of skills than a committee, which reviews only matters of legality and procedural aspects of regulations and disregards the merits and the policies they reflect.
   
3. Some may argue that a Committee of the Cabinet –the Special Committee of Council – already scrutinizes user fees - and indeed it does. But if you talk to users, they will tell you that while the work of this Committee has resulted in an improved emphasis on performance standards when user fees are implemented, there is no real opportunity for this Committee to demand accountabilities from departments and agencies should performance standards not subsequently be met.

Bill C-212 potentially affects Canadians from coast to coast to coast because it applies to federal government departments, agencies, boards, and commissions or any other body that is either regulated by the government or offers a good or service that is provided only by it, and has the power to fix a user fee or a cost recovery charge under the authority of an Act of Parliament. Thus, individuals paying fees to visit a federal park, or those passengers paying the Air Travelers Security Charge, or individuals paying a fee to the Passport Office for a passport, or provincial or territorial authorities paying fees to the Canadian Coast Guard for ice-breaking services, would be affected by this Bill. With the federal park example, however, the amendment I have tabled would exempt materials like firewood from Bill C-212 on the grounds that other options are available to park users.

I have introduced this Bill because of a certain level of frustration with the lack of progress on this issue. The House of Commons Standing Committee on Finance in June 2000 in its report Challenge for Change: A Study of Cost Recovery recommended significant changes to the cost recovery/user fee policy; but progress to date in terms of end results has been minimal. In fact there are concerns that the policy may be moving in the opposite direction!

A Committee of the House would have the power to review every user fee proposal and make recommendations to the House of Commons as to the appropriate fee. Although this step would result in a large volume of work, at least initially, Committees of the House, I expect, would design the appropriate mechanisms to handle the volume of proposals. The formation of a user fee subcommittee, or an exception reporting system, are two such possibilities. We currently have a number of examples where Committees handle a regular volume of similar matters. There would clearly be a learning curve and a bulge of work at the launch of this initiative because many user fees have had very limited or no scrutiny by parliament. This work would become more regularized over time.

In conclusion Madame Chair and members of the Committee, Bill C-212 will encourage companies to make investments and create jobs. It will demand more accountability and transparency from Departments & Agencies. Elected officials will play a more active role in the setting of user fees that generate some $4 billion in annual revenues.

I ask you, colleagues, to support this bill also. It will enhance Canada’s competitiveness and advance our country’s innovation agenda.

Thank you/Merci beaucoup.