[Recorded by Electronic Apparatus]
Thursday, November 30, 1995
.1110 
[English]
The Chairman: Ladies and gentlemen, with the indulgence of our witness and our other guests, I would like to begin by doing a small piece of business that will advance the work of the committee. As you know, for some time particularly Mr. Ménard, but also other members of the Bloc, have been anxious that we establish a subcommittee on the whole question of the defence sector and its conversion to civil purposes. I guess specifically within that we're concerned with the aerospace sector.
I have been talking to the minister, as we've talked together, about the future direction of the committee. There seems to be general agreement that while we will continue with our work on the banks, that will be a more regularized series of meetings on a quarterly basis, on the basis of the documents we've been negotiating with them, and the thrust and direction of our future work will be in the area of science and technology, knowledge-based industries, innovation gaps - the sort of thing Mr. Schmidt referred to in his letter, which goes back to April. The whole committee is interested, I think, in that future direction.
The difficulty we face in defining our work exactly is that we're not quite certain what initiatives will be going through cabinet. For example, we haven't seen the final science and technology review document. We don't know for sure if there is going to be a technology fund, or what form it will take. So we know generally which direction we're going in, but we don't know precisely where we can make the greatest contribution until some of that information comes to us.
One thing we do know is that the OECD has been working a series of studies of all economies within the membership of the OECD but specifically looking at Canada. I think tomorrow an official text will be released on the Canadian economy, with a specific focus on something the OECD is calling the ``innovation gap''. Why is it that we are not doing as well as other countries in the high-tech field and the knowledge-based industry field? The minister has suggested that he will be forwarding this document to all of us and whatever specific work we undertake as a committee in this area might well take this document as its point of departure.
Now, I haven't read through this document. I have some broad sense of what it's about. It will give us a kind of context to move forward on when we come back in February.
It would also be useful if we attempted to relate these larger questions of the innovation gap to the precise sector of defence and aerospace, so the subcommittee can work closely with the main committee and this becomes a kind of worked example of the larger problem. It allows to get us into the kind of detail we will not be able to do as a committee.
So what I'm proposing today, because I think Mr. Ménard's been very patient in asking for this subcommittee to be created and there seems to be agreement around the table that we should do so, is that we proceed with the creation of a subcommittee that will study defence conversion and the aerospace industry in the context of Canada's larger challenges of innovation.
I would propose, having talked to various members, that Mr. Discepola be the chairman of that subcommittee, and he has agreed. I know Ms Brown is interested in being part of it, as is Mr. Murray. Obviously Mr. Ménard is very interested in being part of it. It's completely up to the Reform Party whether they wish to put somebody on this specific subcommittee or reserve their work for the committee of the whole, which will be looking at the larger problem. It's really up to them to decide now or later if they want to take part in this.
I don't know if you have a quick reaction, Mr. Schmidt or Mr. Mayfield.
Mr. Schmidt (Okanagan Centre): I will not respond at this time on whether we go or we don't go.
The Chairman: Okay, fine.
Mr. Schmidt: Just to review, it will be Mr. Discepola, Bonnie Brown, and Mr. Ménard - that's the committee so far?
The Chairman: And Mr. Murray.
Mr. Schmidt: Oh, Mr. Murray. I'm sorry.
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The Chairman: We need to pass a motion that will stipulate this membership, to which we can add later if it's the desire of the Reform Party to put somebody up. So that option remains open.
Mr. Schmidt: I have a question, Mr. Chairman. It deals with what I think I heard you say, that the committee will deal with the defence industry and its conversion into domestic productivity or production, and also in the context of the larger OECD paper. I'm not quite sure of what that last phrase really means, because to me that sounds like an overlap with what the committee must be doing.
The Chairman: What I'm saying is that the whole committee will be getting from the department the OECD study as soon as it can be released, that that report will be informing, I think, the work of the whole committee, but that the subcommittee should take that as a point of departure for its own work. In other words, the subcommittee's work and the committee's work have an integrated quality.
Mr. Schmidt: Oh, sure. That makes good sense. I would just hate to see both committees doing virtually the same work.
The Chairman: No, I think what they're going to do is take on board the OECD diagnostic, and others that might come as part of the work of the big committee, and then apply it to this specific sector to see how it works out in detail.
[Translation]
Mr. Ménard (Hochelaga - Maisonneuve): First of all, I would like to thank you for your perseverance, Mr. Chairman.
I'm sure that the work of the subcommittee will teach us a great deal about the whole issue of the aerospace industry and defence materiel. This industry has been in crisis since the end of the Cold War and the redefining of international policy. There is no doubt that this is of great concern to Quebec and Ontario as they each have 10,000 jobs in this sector.
Following the regional and national consultations undertaken by the Secretary of State, Science Research and Development, I would like to ask you if the committee intends to examine the white paper on national science policy after the holidays.
The Chairman: I would like to let the committee have the opportunity to base its future business both on the study that we will be receiving soon from the OECD regarding science and technology and on other things such as the fund for technology and aerospace, if a decision is made to create it. Indeed, we want to include this latter subject in our proceedings, both at the subcommittee and the committee level.
Mr. Ménard: There is no doubt that we will enter a period where the committee will do less work on the issue of banks and a great deal more on science and technology.
The Chairman: I think so. We will continue with the banks, but on a reduced and regular basis, every three months.
Mr. Ménard: Thank you.
Mr. Bélanger (Ottawa - Vanier): Mr. Chairman, I want to make sure I understood correctly. The subcommittee's job will not be to examine the issue of science and technology as such, correct? That work is to be done by the committee?
The Chairman: I would simply like the committee to operate in the context of the work of the committee.
M. Bélanger (Ottawa - Vanier): That's already quite broad.
The Chairman: Yes, it's a lot.
[English]
Is it agreed that a subcommittee be struck to study what I have just outlined - that is a lovely phrase - and that it be composed of Mr. Discepola as chair, Ms Brown, Mr. Murray, and Mr. Ménard, with the possibility of co-opting or adding to it a member from the Reform Party at a later date?
Motion agreed to
The Chairman: We will now move on to the main event.
[Translation]
Mr. Ménard: I have one last question before we leave. In terms of future business, it will be up to the new Chairman, Mr. Discepola, to look after routine matters?
The Chairman: He hasn't yet received the good news because he is still with the Finance Committee.
Mr. Ménard: I'm counting on you, Mr. Chairman.
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The Chairman: We will contact him directly. I will leave that task to my colleagues.
[English]
All right, now let's have another go at your name, here.
Mr. André Dimitrijevic (Executive Director, Internal Trade Secretariat): Mr. Chairman, when I first came to Canada years ago, I was in a class in high school. A student who sat behind me came up to me two or three months later wondering why the teacher would look at me and say, ``Give me three of each''. My name is pronounced Dimitrijevic.
The Chairman: Dimitrijevic. So it's a ``yet'' with a J. Okay, well welcome, Mr. Dimitrijevic.
You will have perhaps followed the testimony that has gone before. We're particularly excited to welcome you because you have been in the thick of it for the past few days and can bring fresh news from the front on how these negotiations are going. We get snippets of reports from the newspapers, but how are we doing?
Mr. Dimitrijevic: Well, there are two things. I have a little bit of a presentation that I'll go into.
The Chairman: Go ahead.
Mr. Dimitrijevic: Let me suggest first of all that I think you may be aware the agreement came into force on July 1 of this year. I came on board at the secretariat on August 8, so this is very fresh.
You're quite right, though. There was a ministerial meeting of the Committee on Internal Trade in Toronto yesterday. There were very interesting discussions. It was my first meeting with the ministers.
The Chairman: I have to note from your biography that your previous experience includes coordinating emergency measures and being involved with disasters. I don't know whether to be encouraged or worried. Is this your specialization? How does that - Well, never mind.
Some hon. members: Oh, oh!
Mr. Dimitrijevic: Some have suggested that is most appropriate. I'm not so certain myself.
I felt it was a good meeting yesterday. There are certainly some difficult issues to address, but nonetheless my sense was that all the parties are certainly willing to continue to work quite hard. There were some specific directions given to officials of the various parties and to the secretariat to pursue a number of the issues regarding the inclusion of the MASH in the procurement sector regarding simplification of rules across the country with a view to facilitating access, to facilitating registration for businesses. There were some specific directions to continue to work regarding the implementation of the agreement.
What I wanted to focus briefly on this morning, Mr. Chairman, was two or three items: how the secretariat was created, what the organization of the secretariat is, and maybe a little bit on what the role and function of the Internal Trade Secretariat is.
On July 18, 1994, first ministers signed an Agreement on Internal Trade to eliminate barriers to trade investment and mobility in Canada. On July 1, 1995, the agreement came into force. Chapter sixteen of that agreement deals with institutional provisions and provides as follows: ``The committee'' - that is, of course, the committee of federal, provincial and territorial ministers responsible for internal trade under chapter sixteen - ``shall establish a Secretariat'' and ``shall appoint a Secretary to head the Secretariat''. The secretariat is to be funded by contributions from all the parties based on a formula: 50% of the total budget from the federal government, 50% of the total budget from the provinces and territories, with the share of each province and territory to be determined on a per capita basis.
In order to provide further specific direction on the nature of the secretariat, the thirteen parties entered into an agreement on the establishment of the Internal Trade Secretariat in the fall of 1995. In that agreement the parties agreed to establish the secretariat as an association - that's how we exist - and to establish a management board composed of representatives from all thirteen jurisdictions. From a practical point of view, those representatives are the internal trade representatives for each of the provincial, territorial and federal governments. This management board is responsible for the management of the internal trade agreement by providing overall direction to the secretariat as it stems from the ministers.
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This agreement also sets out responsibilities for the executive director for any financial reporting requirements that were required under the agreement.
As you may all be aware, the secretariat is located in Winnipeg, and I am just in the process of staffing and establishing it. At present the secretariat consists of an executive director, an administrative officer and an adviser, all who have been seconded, but my expectations are that in the short term it will still be a fairly small outfit, probably somewhere in the order of five to seven people. The final number of people will be determined as we proceed with the work of the secretariat.
I should note that in the interim period since I came on board and until the secretariat is staffed more fully, officials of Industry Canada have been providing assistance in doing a lot of the legwork - in fact, they're doing the legwork - and their assistance has been invaluable in maintaining the work of the secretariat.
As stated in the agreement, the role of the secretariat is to provide administrative and operational support to the committee, to working groups, to other committees and such other support as the committee may direct. It's committees with a capital ``C'' in this case. In essence, it's the ministers.
More specifically, and as directed by the committee of ministers, I expect that the activities of the secretariat will focus on three main areas. One is something I call ``operational support''. In other words, the secretariat will facilitate meeting arrangements, preparation of agendas and distribution of records of decisions and will do follow-up to work that the committee has asked to be done, follow-up to the work of working groups. The secretariat will also be assisting in the dispute settlement panels when they are set up and will be assisting any other committees established under the agreement.
The second type of activity will be reporting requirements. The Agreement on Internal Trade has a number of reporting requirements that are supposed to be fulfilled, including annual reports and the charting of the progress on the agreement generally as well as specifically for a number of the chapters. More specifically, the secretariat would likely gather and analyse information and prepare reports for the consideration of the committee and of management board.
In the third area, which for lack of a better term I will call public information, the secretariat provides information and seeks information about the agreement from the private sector. That includes business groups, industry associations and the public at large.
It was my intention to provide you with a little bit of information about how the secretariat is set up and what it does and I hope I've managed to do so. I expect that the nature of the secretariat will evolve over the next period of time, to some extent as the agreement itself evolves and changes through future discussions and negotiations.
I'll be pleased to provide you with any further information you may require. Thank you.
The Chairman: Thank you very much for a concise opening statement.
[Translation]
Mr. Rocheleau, do you have any questions?
Mr. Rocheleau (Trois-Rivières): Welcome, Mr. Dimitrijevic.
I would like to know whether you had time to develop any kind of plan of action with regard to your relations with all the stakeholders, all the parties to the agreement that are concerned with Bill C-88.
Mr. Dimitrijevic: It's barely a draft. Frankly, I've been very busy until now in finding new offices and people to work and at the same time doing the work involved in the implementation of the agreement. So a draft operational plan for the Secretariat should not be expected before the beginning of next year. Moreover, the Management Committee, with which I have some contacts, will be meeting by February to review a plan that I will have prepared.
Naturally, I've had discussions with a number of the parties involved, the provinces and the territories on the subject, but generally speaking, I don't really have an operational plan yet.
Mr. Rocheleau: According to your conception of the role of the Secretariat and according to what you have been told so far. Do you think the Secretariat will be involved in any way in the dispute settlement mechanism?
Mr. Dimitrijevic: Since the Secretariat will support dispute settlement, we will naturally help the groups that will be set up pursuant to chapter 17 of the agreement and we will try to facilitate their task.
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From the standpoint of policy or expenditures, it depends more on the parties concerned by the agreement than on the Secretariat. Nevertheless, our role will be to facilitate the establishment of groups that will make judgements on dispute resolution, to facilitate the presentation and preparation of their meetings and to ensure that the decisions made are communicated to whoever needs them. In that sense, we are prepared to lend our support to chapter 17 in its entirety.
Mr. Rocheleau: Can we imagine, according to our own individual perception, that the federal government may, quite legitimately, have a more marked influence than other Canadian stakeholders on the operation, evolution and perception of its role within the Secretariat, given the federal government's well-known power in this country?
Mr. Dimitrijevic: I perceive the Secretariat as a whole entity. For my part, I account to 13 jurisdictions, to provincial, territorial and federal government ministers. I feel they are part of a group of 13 and not a group of 12 plus 1.
Mr. Rocheleau: Thank you.
[English]
The Chairman: Mr. Schmidt.
Mr. Schmidt: Thank you, Mr. Chairman.
It's very good to meet you, Mr. Dimitrijevic. It's really nice to see that you're on board on the secretariat. I have a couple of questions that have to do with exactly how you see yourself functioning.
I hear all these nice words about how you're going to facilitate all these committees, these panels, these dispute resolution groups, and so on. Exactly how do you think you will define ``facilitate'', other than presenting papers, making sure they have their agendas, and so on?
I'm thinking specifically of particular kinds of problems that exist. We'll take the CGA group that appeared, the Certified General Accountants group, and the conflict they have with the chartered accountants. It's the kind of conflict that exists in terms of the professional associations in various provinces and how they will get the mobility going in terms of licensing requirements.
How do you see yourselves facilitating the exchange of information, first of all, and then recognizing where the salient differences are and how they might possibly be resolved?
Mr. Dimitrijevic: Let me try to answer that in a couple of ways. First of all, there is an evolution in the role of the secretariat. It hasn't existed before. It's just coming on board right now.
Mr. Schmidt: Yes, of course. I appreciate that. I'm asking for your vision, really.
Mr. Dimitrijevic: I'll share it with you, but I also want to set it in context.
There is a parallel; there is a secretariat that has existed for a number of years called the Secretariat to the Canadian Council of Ministers of the Environment, a very similar process although obviously their area is different. Again, it's interesting to note that they started as being far more administrative and they've now moved to a position where they're actually drafting policy for the consideration of the other parties. That situation requires a level of comfort on the part of all the participants about the nature of the group they're dealing with.
From my perspective - and of course my activities will be governed by directions I receive from the ministers and, through them, from the management board - where I see the potential is in fact going and talking to these people to identify what exactly are the problems at issue, what the differences are that exist.
I think one of the issues of the CGA, if I remember correctly, is the fact that they cannot perform certain functions in certain provinces while they can in others. I think they're concerned that this impedes on their members' abilities to offer similar services across the country. Generally, I think that's one of their concerns.
Where the secretariat could do the work is on behalf of the parties. It could go and in fact talk to the various groups, including the parties, including the provinces, and then provide an independent assessment of the situation for the consideration of the management board and ultimately the ministers.
Mr. Schmidt: I'd like to pick that independent assessment thing up. That's a really interesting observation. You see yourself as being able to objectively evaluate the particular biases that exist - take out the biases or at least articulate the biases - of one group versus another group.
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Mr. Dimitrijevic: It's independent in the sense that, as I said, I report to all thirteen parties; I don't report to any one party. I think that's the nature of the secretariat. From that point of view, I should be able to present an idea of what the situation is as objectively as possible, keeping in mind that the secretariat is there to implement the Agreement on Internal Trade.
Mr. Schmidt: I appreciate that. I'd like to move that aside and go a little into two different areas. I'll use an example in the one area and then go on to the second part.
I'm not an expert on transportation -
Mr. Dimitrijevic: That makes two of us.
Mr. Schmidt: - but I do know something about it. I know it is probably one of the most contentious issues that will face us, especially when we have all kinds of regulations and legislation within the provinces. Now we're trying to smooth out this highway, if you like, literally across Canada, and the legislation is horrendous, really. I am just becoming familiar with all the various vagaries that exist from one jurisdiction to another one.
How big do you think your staff is going to have to be just to understand what's going on, never mind doing the analysis you've just referred to?
Mr. Dimitrijevic: I can't speculate. My idea would have been that the secretariat would be a fairly small unit, with very qualified people, who can go and get to the salient points of a problem, working with provincial and federal officials but also working with the officials of the party. But at this stage I don't think I'm able to speculate beyond that. I still see this as being a fairly small unit.
Mr. Schmidt: Okay. That's very encouraging. But you're going to have all these experts. So does this mean you'll hire them or retain them for specific tasks and then disband them?
Mr. Dimitrijevic: That is certainly an option that could be pursued.
Mr. Schmidt: Is that your preference? That's really what I'm after. If you go the permanent route, that's one way. You get the experts that way. The other one is to get the real experts who are out there practising. You don't need them all the time.
Mr. Dimitrijevic: No. I think what you want is to have a core group of people who are able to direct this work.
Mr. Schmidt: Yes.
Mr. Dimitrijevic: This work is going to need somebody to be in charge overall. You may then further have the need to bring in specific experts to deal with specific issues - or rely on the experts that governments of other parties have at hand and use them. But you still need some sort of a core group.
Beyond that, I don't think there is a need to proceed to anything larger. Bringing in specific groups to address specific tasks makes a lot of sense. Then once the task is completed you just -
Mr. Schmidt: I hope you do that, because I think that's going to be far more efficient and much more cost-effective.
My last question has to do with research. When you went through your functions at the moment, there was no reference to research you might have to do. If you're going to do policy development, obviously you're going to need some research staff. What are you contemplating in that area?
Mr. Dimitrijevic: Research at this stage - in fact, policy development at this stage is something I could undertake only at the direction of the parties. I indicated that earlier. My feeling is that again, I'm not looking at research staff per se. I would rather approach people of a calibre who will be able to undertake research when it's necessary and will be able to manage the process when it's necessary. A little versatility will go a long way in the staffing of the secretariat.
The Chairman: Mr. Bélanger.
[Translation]
Mr. Bélanger (Ottawa - Vanier): Mr. Chairman, I simply want to congratulate Mr. Rocheleau for his subtlety and his ability to make us see red. He managed to do this once again by insinuating that the federal government would have a stronger voice in these matters than the provinces. I would like to point out to him that if I'm not mistaken, according to the agreement that was signed the federal government contributes 50% of the Secretariat's budget. It is quite appropriate that whoever pays the largest part of the bill have a bigger say. Notwithstanding Mr. Rocheleau's objection, I think that's completely normal.
Moreover, to my knowledge, the provinces didn't balk about this. That should be pointed out.
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Secondly, I would like our witness to tell us the size of the Secretariat's budget right now.
Mr. Dimitrijevic: For the first year, the budget is $750,000.
Mr. Bélanger (Ottawa - Vanier): Am I right to say that 50% comes from the federal government and 50% from the provinces?
Mr. Dimitrijevic: Absolutely.
Mr. Bélanger (Ottawa - Vanier): How does the payment mechanism work in practice? How do you obtain the money that enables you to operate your Secretariat?
Mr. Dimitrijevic: We calculate the amount of the contribution of the various parties, provinces and territories.
Mr. Bélanger (Ottawa - Vanier): At a specific time of year?
Mr. Dimitrijevic: This time, we only started up August 8th. It took a bit of time, of course. For the 1996-97 fiscal year, we intend to request the contribution on April 1st. Contributions will therefore arrive as early as possible.
Mr. Bélanger (Ottawa - Vanier): How are things being done for the current fiscal year?
Mr. Dimitrijevic: For the current fiscal year, I received cheques from all the parties. In the case of the federal government, there's a contribution that's paid every three months.
Mr. Bélanger (Ottawa - Vanier): To date, has everyone paid?
Mr. Dimitrijevic: Yes, everyone has paid except for Prince Edward Island, whose cheque I haven't yet received.
Mr. Bélanger (Ottawa - Vanier): Thank you. How many people does the Secretariat anticipate employing?
Mr. Dimitrijevic: When we have our full complement of staff, I think we'll be between five and eight people maximum.
Mr. Bélanger (Ottawa - Vanier): Will these people be employed on contract or for an indeterminate period?
Mr. Dimitrijevic: There has been no resolution about this. These will be people employed by the Secretariat. They will not necessarily be contract positions, but that's an issue that must be determined as we receive applications for the positions we're trying to staff.
Mr. Bélanger (Ottawa - Vanier): How was the site chosen?
Mr. Dimitrijevic: Winnipeg? That happened before I arrived, but I think the Premier of Manitoba had some discussion with the other provincial premiers, and that's the solution that was adopted.
Mr. Bélanger (Ottawa-Vanier): Thank you.
[English]
Mrs. Kraft Sloan (York - Simcoe): I'm sitting in on the committee today, so I'm very interested in your secretariat.
By removing these internal trade barriers, Canada will go a long way in enhancing its economic development potential, but I also have concerns around the shift towards sustainability and ecological responsibility.
I noticed in your preamble that the governments, federal and provincial, are resolved to promote sustainable and environmentally sound development.
I also understand that you are new to your position, and I congratulate you on that position. I'm sure that you have a lot of things that you have to consider and a lot of things to learn, but I was wondering if you had some knowledge of how the secretariat would support or how the committee on internal trade was going to act to ensure that environmentally sound practices occur - just in a broad way - if you have any thoughts.
Mr. Dimitrijevic: I'll give just my sense. I probably won't even be able to refer you to the appropriate section in the agreement.
Two things come to mind. Of course there is a chapter on environment related to issues. In fact, there is a role that the Canadian Council of Ministers of the Environment carries vis-à-vis the implementation of the agreement. So there is an aspect related to environmental and sustainable development issues.
Mrs. Kraft Sloan: So they're involved with this agreement as well.
Mr. Dimitrijevic: They are involved with this agreement as well.
On the other one, I'm a bit reluctant to make the reference since I don't have it in front of me, but there is provision that parties cannot use a reduction in environmental standards as an incentive. So the agreement does address related to sustainable development and does rely on the existing Canadian Council of Ministers of the Environment to assist them in these deliberations.
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Mrs. Kraft Sloan: It's interesting that you mentioned that article. It's article 610, page 83. That had caught my eye as well. If the chair indulges me on this, I'll read it into the minutes:
- 1. No Party shall waive or otherwise derogate from, or offer to waive or otherwise derogate
from, its environmental measures as an encouragement for the establishment, acquisition,
expansion, ongoing business activities or retention in its territory of an enterprise.
I think what we're witnessing here in Ontario is a major shift in the area of environment. There's certainly a loss in environmental protection to a tremendous degree. Is that considered to be something that is waiving an environmental measure as an encouragement or is that considered to be just so wide-ranging that it's just a brand-new philosophical approach? Do you have any thoughts that you you might be dealing with something like that?
Mr. Dimitrijevic: I would be a bit reluctant to tread in that area, mostly because I think there might be a question of interpretation between the parties, rather than something for the secretariat necessarily to comment on.
Mrs. Kraft Sloan: Right.
Mr. Dimitrijevic: The broad intention of chapter six on investment is obviously as it is applied to any particular unit.
Mrs. Kraft Sloan: Yes. It's a particular, specific situation. I agree.
Mr. Dimitrijevic: That would be my sense, but probably legal advice, if one wanted to go beyond that, should be sought.
Mrs. Kraft Sloan: Yes, I know. In my understanding of this article, it has to deal with a particular deal in which a province or a party might say they will waive this so you can set your enterprise up here. But when you're dealing with such a wide-ranging change in the environmental regime in the province of Ontario, it poses another interesting dilemma. Thank you.
The Chairman: You also have chapter fifteen, which deals specifically with environmental protection, doesn't it?
Mr. Dimitrijevic: Yes, that's the environment chapter.
The Chairman: I would assume, as well, that the part of chapter four that deals with standards as a category might have some play, too. Would that be correct? In other words, annex 405.1 just deals with standards generally, but I assume that would have some - Actually, there's a reference here in chapter fifteen to that annex 405.1.
Mr. Dimitrijevic: The entire agreement encourages the harmonization of rules and regulations to facilitate a common basis across the country.
The Chairman: Yes, and it also involves the Canadian Council of Ministers of the Environment under article 1509.
Mr. Murray (Lanark - Carleton): I would like to get a better handle on what your role involves. I understand the secretariat provides administrative and operational support to the committee, but what latitude do you think you might have over time to become champions of freer trade within Canada yourselves? You'll build up a body of expertise and knowledge. As years go by, and as individual ministers come and go on committee, you'll be the repository for that knowledge.
Do you see much latitude for the secretariat to play a more active role in actually promoting internal trade than perhaps its present role?
Mr. Dimitrijevic: I think the potential is there. I think it will be subject to the direction of ministers. I can even refer to my experience yesterday at the ministerial meeting, where there was a specific direction for the secretariat to go seek views from all the parties, and also from the private sector, on issues about the agreement that might be coming up.
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Already, it seems to me the ministers are looking at the secretariat as a clearing-house or a core of knowledge on the issue whereby we could go out to solicit opinions for the information of the ministers.
We do have to produce an annual report on the progress achieved on the implementation of the agreement. Obviously, in order to prepare an annual report on the progress, there would have to be all sorts of research done on the impact and what has happened with appropriate discussions with a number of groups across the country.
Mr. Murray: We've been told the barriers that exist cost the Canadian economy hundreds of millions, if not billions, of dollars in terms of lost efficiency and cost to consumers.
With that kind of money involved, there must be certain players whose ox will be gored worse than somebody else's. Somebody is going to lose out in this in many cases. Some of them will probably lose a great deal, I would assume.
I imagine most of the research still resides with the federal Department of Industry and provincial departments. You may not have had your hands on this yet, but I'm just questioning whether you're going to find that there are some very tough nuts to crack when you look at individual companies perhaps or industries that could be damaged quite severely if they have to live by the terms of this agreement. Have any jumped out at you yet that are going to pose really serious problems?
Mr. Dimitrijevic: I can't think of too many specific ones. There are obviously some general concerns from a number of sectors about the implications of the agreement on their way of doing business.
I saw the intention of the parties to the agreement as being for simplifying things rather than for adding a complicated effort throughout this. That was my reading when I talked to officials and when I attended the ministerial meeting.
There are, of course, going to be specific issues that come up that will need to be discussed in terms of impact and how you approach a particular problem. I think that the parties and the agreement contain some level of flexibility in terms of some of these discussions, but it's difficult for me to assess at this stage the level and amount of concern that may come up in the future.
Mr. Murray: I have just one final question again on the role your secretariat will play. Would you see yourselves being lobbied by concerned interests, or is that avoided somehow by your terms of reference? Will they be knocking on your door, or will they always be directed to the ministers?
Mr. Dimitrijevic: They may knock at my door, but I would suspect they would probably want to talk to ministers rather than to the secretariat.
Mr. Murray: Okay. Thanks very much.
The Chairman: I'm keeping an eye over here, so don't be bashful.
I see Mr. Mayfield and Ms Brown.
Mr. Mayfield (Cariboo - Chilcotin): Thank you very much.
I want to thank you for being here this morning, Mr. Dimitrijevic. I'm still trying to get an idea of the shape of this creature of the secretariat.
I understand that you are ultimately accountable to the ministers of each province and, I presume, to the federal government, too. How is that accountability coordinated over such a broad spectrum? Is there an intermediary. Do you relate individually to each of them?
For example, who would audit your books? Would it be one of the provinces or the federal government?
Mr. Dimitrijevic: There is an agreement to establish the secretariat that all of the parties signed. It provides for some specific financial reporting requirements, including the fact that my books are going to have to be audited by an approved auditor. It even provides for the fact -
Mr. Mayfield: Who would approve the auditor?
Mr. Dimitrijevic: A committee of ministers. I don't report to ministers individually; I report to the Committee on Internal Trade, which is made up of the ministers, and which goes through the management board. There is a management board made up of senior officials. There's the committee of ministers, the management board, and the secretariat.
That's for the reporting procedures. The financial requirement functions are set out as well in terms of how we operate.
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Mr. Mayfield: Is there a mandate that you have in this particular position? Mr. Schmidt was asking about your vision, but is there a mandate that was offered to you as you begin your position that you perhaps use as a platform for your vision to take off from?
Mr. Dimitrijevic: My vision takes off from the agreement itself and the references to the secretariat and to the executive director, and from this agreement to establish a secretariat, which provides a bit of further detail on where we shall go with it. I then take those two and prepare for the consideration of ministers, on a yearly basis, an operating plan. This is how I'm going to be implementing what I have been asked to do. The management board, which is directed by them, approves that plan - and budget. But it's a plan. It's the operational plan that really tells them what the secretariat will be doing.
Mr. Mayfield: In the course of questioning this morning, we've also raised words such as dispute resolution, lowering of barriers. Those have been mentioned to you.
Do you see yourself as working towards lowering barriers as well as resolving, or attempting to resolve, disputes? Do you even foresee the day when perhaps there will be a free trade agreement between the provinces, as exists between Canada and other countries?
Mr. Dimitrijevic: I feel that the agreement itself represents a substantial step in addressing the issue. Historically, we arrived at the point at which we are today over a very long period of time. The agreement has come into effect only as of July 1, but I see it as being a significant step on the part of all thirteen governments to enter into this agreement, and in fact to start implementing substantially a number of its portions. The portion on government procurement has been working for some time.
I also see the agreement as having a number of obligations that it prescribes will be conducted over the next few years.
So there is the agreement itself, which is a substantial piece of work; there are obligations under the agreement for more negotiations; and there is a requirement in the agreement, in chapter eighteen, for an annual review of what else we need to do. Ministers are very much aware of that.
If I may refer to that article - On page 200, it is article 1810, paragraph 4:
- 4. The Committee shall review annually the scope and coverage of this Agreement and may
make recommendations for the inclusion of measures not otherwise covered by this Agreement
or of new chapters.
- So that opens this annual requirement.
Mr. Mayfield: Would you see yourself as a facilitator of increasing commercial activity between provinces?
Mr. Dimitrijevic: Only in the sense of the effort that the secretariat will provide to the parties in implementing the agreement. The responsibility for trade is up to individual parties to do. Our role is to facilitate the implementation of this agreement. Inasmuch as we fulfil that role, I suppose that whatever impact there is should indicate our contribution to increased trade, but there's no direct involvement at all on the part of the secretariat.
Mr. Mayfield: I was interested in Mr. Murray's question. My concept of it perhaps is just a bit different from yours, Mr. Murray. I guess I was thinking of asking a store manager at an intersection where there were three relatively large grocery stores how they made a living there. He said, ``No, that's the best way to do it, because so many more people come there. It's better for all of them if they do that''.
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Perhaps it would not be so much an ox being gored, as Mr. Murray suggested, as providing greater opportunities. I'm always interested if there's a way of pushing this forward, and I guess that's the basis of my question.
I thank you for your responses.
The Chairman: Ms Brown.
Ms Brown (Oakville - Milton): Mr. Dimitrijevic, welcome here. I'm hoping in your earlier education you learned something about stick-handling or tap-dancing or something like that, because I see from what you're describing that the exercise of your power is going to be somewhat constrained by these thirteen masters, or these two boards and committees you'll have to serve.
I guess the idea I'm trying to get out of you is how much do you think you and your staff of about six, which will essentially be the hub of the most current knowledge about the state of internal trade in the country - how much power do you think you'll have, or how proactive do you think the agreement allows you to be?
I'll use an example. You just said the first meeting of the ministers was yesterday. May I ask you who set the agenda? How did items get on that agenda, from them or from you?
Mr. Dimitrijevic: The first meeting may be a bit difficult, given my newness. But in very practical terms, the agenda was set at a meeting I chaired of all the internal trade representatives, who are the senior officials for all the parties. We sat at a meeting. Some items were outstanding. They were quite easy to put forward. Some other items were suggested around the table. We developed an appropriate agenda.
Ms Brown: So the representatives at the management board level essentially created the agenda for the ministers to address yesterday.
Mr. Dimitrijevic: Yes, that's right.
Ms Brown: Okay.
Now, suppose you have complaints from a certain industrial sector, one that is supposed to be included in this, not one of those which are excluded, and say the members of that sector in the province of New Brunswick are writing to you to say this seems to be going against the agreement. Would you then put that on an agenda and bring it forward to the management board, or would you force the person bringing it to your attention to go through the formal sending in of a - so you had to get into this dispute resolution mechanism thing?
Mr. Dimitrijevic: First of all, the agreement overall on dispute resolution really encourages the resolution of disputes by having the parties, whatever the parties may be, whether government or private sector, talk to one another. Before you actually get to a panel to rule on any dispute, the agreement is just full of other suggestions: let's have the parties talk, let's get another group, a committee, to see if we can help them. The process ends up at the panel level. It's really the last step.
Ms Brown: The last resort.
Mr. Dimitrijevic: Exactly. From that perspective, the advantage here is that there must be other better ways, or other ways that don't involve a panel for resolving disputes.
From a very practical point of view, if a private sector enterprise in one province has a problem with another province, it only makes sense that they should go through their home province to find out - because that's where the interest will lie. Again, we will facilitate, but to use your example of a New Brunswick company that may have had a problem procuring material for another province, they are much better off dealing with the New Brunswick people, because they are the people who are going to champion their cause, in essence.
As you are aware, the agreement does provide that if they are unsatisfied, or if the home province was not able to champion their cause, there are provisions under chapter seventeen for them to use the dispute resolution provisions. Nonetheless, it makes more sense for them to use their own home province to champion their cause.
Ms Brown: I'm worried about that, because it seems to me it may be in their own home province's interest, for political reasons, not to disturb the status quo. I see your body as a place people can go when they aren't being served.
Take for example my main concern, which is before the mobility of goods and services, and that is the mobility of people and professional qualifications, such as the case alluded to by Mr. Schmidt, the CAs versus the CGAs. I'm sure there are others: the role of midwives and what they can do; all those things which so far have been under provincial jurisdiction. It seems to me that the CGAs of Ontario might go to the Ontario government, but the Ontario government might not want to rattle the cage of the CAs; so they won't get any satisfaction, and therefore you are the place.
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I see that you have to do this juggling. And there are vested interests, represented by all thirteen component parts of both board and committee. So how can we help you strengthen the fact that you are there as the place to go to for a person who isn't being served by the provincial interests?
Mr. Dimitrijevic: The secretariat is not a policy-making body. The agreement is clear. It's for administrative and operational support, and the secretariat will implement directions of the minister as to what tasks it may do.
Ms Brown: I understand that, but you said this is a living document. We all know that it's only begun. So will you actually be bringing issues forward to the management board and saying, ``Look, I'm getting complaints from three parts of the country on this and I think we should begin to work on this''? How pushy are you going to be?
Mr. Dimitrijevic: I think it behoves me to raise with the management board and with ministers issues that I identify in the course of carrying out my business that affect the implementation of the agreement. That includes any issue that may arise. I think that is just part of what I would do.
Ms Brown: What about the extension of the agreement, where you see opportunities to -
Mr. Dimitrijevic: Again, it's the same thing. As I said, the secretariat is responsible for an annual report on progress in the implementation of the agreement. It seems natural to me that if you're going to look at how the agreement is progressing, you're probably going to pick out areas that need to be addressed that have not been addressed before. Again, I think my responsibility would be to bring that forward to the management board for the consideration of the ministers. To me it seems very straightforward. That is part of what I do.
Ms Brown: Thank you very much.
Thank you, Mr. Chairman.
The Chairman: My last couple of questions really dovetail with what Ms Brown was saying.
Our previous witness, Mr. Schwanen from the C. D. Howe Institute, said that - We were asking him how this thing could move forward faster, how we could create some momentum, a sort of dynamic for change, and if there is a role here for the secretariat to be an agent of change. He said that just within the language of the agreement there was plenty of scope for you and your group to really drive this process while apparently just providing operational support, reporting requirements and public information.
That is to say, if you chose this role of entrepreneur - and I use the word provocatively - simply by working closely with the management group, simply by choosing to highlight certain issues to bring up to the council and simply by calling the bluff of the ministers who say they want something done about something but aren't very precise about it, you could have an enormous influence.
The model Mr. Schwanen talked about was the European Commission. I realize that this is the ultimate loaded question, because if you were planning to do that, you wouldn't want to let them know, necessarily. But do you see that there is a capacity here for a person in your position to be such an entrepreneur?
Mr. Dimitrijevic: I believe there is capacity to undertake any activities to promote the agreement and to promote the implementation of the agreement. I think that is very well within the purview, but in my case again, it's subject to the direction of the ministers.
My sense from my meeting yesterday is that in essence I've received that direction to seek advice from a number of groups, not just from government groups but from groups across the board, and it is something I intend to do. And I intend to report back to ministers on what I hear and what I find out. From that perspective I guess the field is wide open. I can talk to a variety of groups, be they professional associations like the CGAs or business associations or MASH sector groups, seek their opinions, and then feed that back to the ministers.
The Chairman: So I assume that with the vast range of issues that come forward you could say - while working with sympathetic souls on the management board and understanding where the strengths are among the committee of ministers - ``Okay, let's set ourselves three or five targets this year and try to knock those off'', as opposed to just sitting back and reacting to things.
That would be within the capacity and the purview of the secretariat. You could assist in giving some focus and some priority while interpreting the wishes of the committee of course.
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Mr. Dimitrijevic: I see that as being the function of my preparing an operational plan for the next fiscal year. It would be put together based on my knowledge, at the time I put the plan, of the issue of what activities the secretariat should concentrate on over the next year.
Again, and you said quite correctly, that has to be approved by the committee of ministers. I ultimately take my direction from it.
The Chairman: My final question is simply about the press reports. Were these discussions in camera yesterday or were they open? Were people sitting there like this?
There was a press report that suggested, and correct me if I am wrong, that Quebec was more aggressive on the subject of reducing interprovincial trade barriers. I am not saying it was more aggressive than other people, but the press seemed to think this was worthy of note. Is that a true reflection? Was it an open meeting and how do we know?
Mr. Dimitrijevic: The meeting was between ministers and officials only. There were some issues where parties came from different angles. The one issue was the incorporation of what is referred to as the MASH sector into the procurement chapter, and there are some differences.
The majority of provinces support what is referred to as a rules base - very specific rules on how you approach the inclusion of the MASH sector into the procurement chapter. Other provinces support a principles base, which is a bit more general - here are some principles that you will adhere to.
To bring the two groups together is obviously what everybody is striving to do, and it will take some time. In fact, it has taken longer than expected to achieve. So from that perspective, in the case of the Province of Quebec, it is very much in favour of rules coming in as soon as possible. Maybe reference was made to that aspect.
On the other hand, everybody across the board at the meeting yesterday agreed there were unnecessary and complicated measures in Canada among the various provinces in terms of registration. I think one of the examples that was brought forward was if a hypothetical company incorporates in New Brunswick and then goes on do the same in five other provinces, there is so little harmonization of the requirements that it becomes unnecessarily complicated.
They all agreed to look at their requirements and simplify them as much as possible so at least reporting dates, for example, for companies will be the same. They won't vary from one province to another. They also agreed to look at the fee structure so they don't put undue expenses on companies that are being formed. So there was general agreement to proceed on that basis.
In the MASH sector, there are some differences that need to be resolved. My feeling is that it will happen all the time with the agreement. Some issues will be readily resolvable and others will take longer to address.
The Chairman: I want to thank you on behalf of the committee for coming before us. I think we found it very helpful as a bit of a reality check on things we'd heard previously. We were able to test various hypotheses that other people had put to us.
I think we are - speaking for myself - very encouraged by what we hear. I may even answer my own question and say I think we've heard from a policy entrepreneur. I hope we have, and I hope you're having fun with this and will continue to do so.
We'll look forward to periodic updates on how it's going. Good luck to you.
Mr. Dimitrijevic: Thank you, Mr. Chairman.
The Chairman: Thank you very much.
[Translation]
Mr. Beaudet will now give us his speech. Welcome.
Mr. Pierre Beaudet (Legal Counsel, Association nationale des camionneurs artisans, Inc.): Thank you.
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The Chairman: We have the text in both official languages.
Mr. Beaudet: Mr. Chairman, distinguished members of the Committee, on behalf of the members of our Association, on behalf of the President of the ANCAI, Mr. Clément Bélanger, and the Executive Vice-President, Mr. Jean-Pierre Garand, who are with me today, and myself, I sincerely want to thank you for giving us this opportunity to express our views before your Committee.
Let me first mention that the Regulations on bulk trucking represent a social measure of public interest. They were adopted in 1973 by the Bourassa government.
In order to meet the transport objectives set by the federal government, the Quebec National Assembly, at the end of 1987, excluded general trucking from the Quebec Transport Act. The Truck Transportation Act was thus drafted and passed.
However, the Transport Act and its regulations were maintained for reasons of public interest.
When the Agreement on Internal Trade was signed in 1994, the Quebec government decided to exclude the Regulations on bulk trucking from this agreement.
In June 1995, the Quebec Minister of Transport, Mr. Jacques Léonard, informed his federal counterpart, the Honourable Douglas Young, that he deemed it necessary to uphold the Quebec Regulation on bulk trucking.
Provincial laws and regulations as well as provincial jurisdiction in the transport sector are currently protected by Part III of the federal Motor Vehicle Transport Act of 1987, which deals with road transportation undertaken by extra-provincial enterprises.
If Part III of the 1987 Act is repealed by the passage and coming into force of clause 19 of Bill C-88, the laws and regulations that the provinces want to uphold will become inoperative.
Our association supports the free flow of transport material between two or more provinces as long as it is material provided for in the Act respecting truck transportation or even according to the Regulations on bulk trucking.
Our association also agrees that an extra-provincial transport enterprise that operates in accordance with the Act respecting truck transportation may be permitted to transport any material provided for by this Act, even when the transport flow occurs within the borders of a single province.
However, our association is adamantly opposed to seeing an extra-provincial transport enterprise loading and unloading material covered by the Regulations on bulk trucking within the province of Quebec, without holding a permit to do so. Such unlawful operations would destroy all of the objectives that were set in the Regulations on bulk trucking.
On that, I should remind you that the Quebec government has founded the Regulations on bulk trucking on the four following principles: one permit per truck, brokerage performed by non-profit-making organizations, fixing of a price scale established by the Quebec Transport Commission, and permit regionalization.
For its part, the Act respecting truck transportation rests on opposing principles. A single permit is granted to an enterprise that may possess any given number of trucks. Furthermore, brokerage in the general trucking industry rests on profit making and there exists no fixing of a price scale.
The Regulations on bulk trucking provide that any company that operates a business office in Quebec may obtain a bulk trucking permit. If a Quebec-based extra-provincial enterprise is not subject to the various Quebec laws on the transport of bulk material, it will be able to ensure its trucking services during the course of its daily extra-provincial operations, but will also have the option of building up a truck fleet to carry out bulk trucking in Quebec close to its business office.
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The trucker specializing in transport of bulk material is in fact a wage earner with no collective agreement or fringe benefits. The trucker holding a bulk trucking permit transports bulk material on a building site, or forestry products from the felling area to the mill, or snow and salt during the winter season. Generally and naturally, the return trips are done with an empty truck.
That is why the Quebec legislature has, on numerous occasions, decided to uphold the Regulations on bulk trucking.
The extra-provincial enterprises from other provinces will never threaten the Regulations because 99.9% of the time they are transporting material provided for in the Act respecting truck transportation. Moreover, I would find it difficult to comprehend that a transport enterprise from another province could, after delivery, delay return and take part in clearing snow or transporting building materials such as sand, earth or gravel. For one thing, it would not have the required equipment to perform such tasks.
The repeal of Part III of the federal Motor Vehicle Transport Act for extra-provincial enterprises will have ill-fated consequences by creating two classes of resident truckers: one subject to the Regulations on bulk trucking, the other completely free to perform any given operation.
Is section 19 of Bill C-88 not really a sword of Damocles hanging over the jurisdictions of the provinces that would elect to uphold their position of protecting some of their laws and regulations right until the end of the upcoming negotiations provided for in the Agreement on Internal Trade? I respectfully submit to you that the Parliament of Canada cannot, without prior consent by the concerned provinces, insert provisions into Bill C-88 that could render inoperative the legislation and regulations enacted by the provinces when the Agreement on Internal Trade was signed.
We are convinced that the objective sought by all signatories to the agreement was to ensure the free flow of materials provided for in the Act respecting truck transportation. The goal was to reduce transport costs for business and thereby for the consumer by providing for partial return loads for trucks even within a single province. In short, the objectives pursued by the Agreement on Internal Trade are not in any way reduced by the upholding, in Quebec, of the Regulations on bulk trucking. We sincerely believe that the policy we are today defending is not only that of our members, but is also shared by the former Bourassa, Levesque, Bourassa again and Johnson governments as well as by the Parizeau government now in power.
Thank you for your attention.
The Chairman: Thank you very much, Mr. Beaudet. I now turn to Mr. Rocheleau, who will have 15 minutes.
Mr. Rocheleau: I'll share those 15 minutes with my colleague, Mr. Guimond, who is our transportation critic.
Firstly, I would like to thank you for your presence and congratulate you for the work you do for your members. I've noticed, as the industry spokesperson, how the members' interests are of concern to you and how determined you are to defend those interests.
I want to make very sure I understand the problem you've presented to us this morning. I'll try to sum it up and you can tell me, perhaps by going into greater detail, if I've understood correctly.
If I correctly understood Part III of the federal Motor Vehicle Transport Act, an extra-provincial enterprise that carries out transportation from one province to another is subject to provincial regulations or legislation, if any, that provides for interprovincial transportation.
What you are afraid of with clause 19 of the Bill, which would eliminate Part III, is that in a province such as Quebec where regulations exist, people will now be able to hold an extra provincial permit and carry out the same activities as people who have a provincial permit, and provide domestic transportation without having to comply with the rules of the games that you are subject to.
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Is that right?
Mr. Beaudet: That's correct, Mr. Rocheleau, all of the more so because bulk trucking in Quebec, as I said previously, is limited to the transportation of sand, earth, gravel and bituminous concrete on building sites, to the transportation of timber from the felling area in the forest to the mill and to snow clearing in cities.
The trucker from another province who comes to Quebec to make a delivery is, in 99% of cases, delivering a finished or mill-processed product and returning to the other province.
We totally agree with the Canadian effort to allow for interprovincial transportation. These people come to Quebec with their equipment, which is probably a closed box or some other specialized vehicle, and they may - for instance - go to Jonquière and leave their load at Alcan, then take another load, bring it to Trois-Rivières, and then go from Trois-Rivières to Sherbrooke, and finally go home. That will reduce costs, and I think that that is the aim of the Truck Transportation Act and of the Parliament of Canada.
However, by passing clause 19 and repealing Part III, you are nullifying the difference between two residents, one having an extra-provincial enterprise and the other complying with the regulations on bulk trucking.
It's not the people from Toronto or anywhere else that worry us, because they have the right to come to Quebec, just as Quebeckers have the right to go elsewhere. Free flow is certainly an improvement for everyone. However, as we have a specific Act in Quebec, a citizen from another province, who may have a place of business in Quebec, must play by the same rules as the Quebec bulk trucker who is limited in the way I explained to you.
We accept the delivery returns in order to cut costs, because we understand that it's in keeping with trucking generally. However, concerning constitutional rights, and I won't dwell on this because you have more experience with it than I do, Quebec jurisdiction as to transportation is protected under Part III, because it puts the extra-provincial enterprise above Quebec laws. The Truck Transportation Act provides for a system adopted throughout Canada, whereas bulk trucking depends on employer-employee relations.
I'd like to conclude with an example, if you don't mind. A trucker who does forest products transportation, from the felling area to the mill, does it with a truck that belongs to a company that employs him four or five months a year. That employee does not have a collective agreement and doesn't have the right to change employers because the company will penalize him by taking away seniority. And obviously, he can't leave the mill with a load, because he is going back to the woods. It's not at all the same as the general trucker who can change shippers or employers every day because he is, in effect, a trades person.
In bulk trucking, in Quebec, there are independent truckers, and I would go so far as to say that 7,000 individuals hold 10,000 bulk trucking permits, which makes for an average of 1.6 permits per permit holder. They are therefore active employers. Thank you.
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Mr. Rocheleau: I'm trying to assess what you expect to get from your representation. In the first paragraph of page 2 of the French document, it is stated that if Part III of the Motor Vehicle Transport Act is repealed by the passage and coming into force of clause 19 of Bill C-88, the laws and regulations that the provinces wish to maintain will become inoperative in practice. I think that you want clause 19 to disappear from the Bill or for an amendment to soften it, at least as far as Quebec activities are concerned.
Mr. Beaudet: We don't necessarily know all the areas affected by this clause, and we'd like you to at least protect the provinces' jurisdiction, obviously without giving up the objectives you had in mind. You want to repeal Part III. It would be better to improve it so as to reach your objectives.
This could be done by striking clause 19. Before passing clause 19, there should be that two-year round of negotiations. If a province decides to keep such and such a regulation, the federal government could use section 19 as a weapon. In effect, if a province absolutely wanted to keep a provincial law, the government could invoke section 19 and render it inoperative.
And it's not just Quebec that could end up in this situation. There are certainly other provinces. I saw the list of exceptions; there are some in New Brunswick, in Ontario, and everywhere. That's the reason we would like - Currently, you are going beyond the Agreement's objective.
The Chairman: Mr. Guimond.
Mr. Guimond (Beauport - Montmorency - Orléans): How many members do you represent in Quebec?
Mr. Beaudet: The Association nationale des camionneurs artisans, now before you, and its affiliated organizations represent, as we don't have the Rand formula, more than 4,300 permit holders out of the 7,500 bulk trucking permit holders of Quebec, which is to say more than half.
Mr. Guimond: I don't know whether this exists in the other provinces, because I haven't done any research on it, but I'd like to know why it was so important for Quebec to adopt regulations on bulk trucking. Why?
Mr. Beaudet: There was an inquiry in 1966, because there were widespread problems. There was outrageous exploitation. People couldn't change employers. They were at the mercy of whoever wanted service, who could get the lowest price. I agree with the principle, but there is a limit nonetheless. The Quebec government decided to adopt these Regulations for reasons of public interest and to keep up a fleet, because it isn't always true that the lowest price is the best solution, particularly if it leads permit holders to bankruptcy. The Quebec government therefore passed an act under the Bourassa government, when the Minister was Mr. Bernard Pinard. It was upheld in 1988 by Mr. Marc-Yvan Côté. It was reassessed under the government of Mr. Johnson, which also upheld it. That is the reason why it was protected in the Agreement.
When we read the Bill, we told ourselves that if clause 19 was passed, ``crafty little survivors'' in Quebec, as you might term them, would consider themselves extra-provincial enterprises and would think that they were allowed to do anything: buy as many trucks as they wanted and go work at James Bay and anywhere else, whereas others, next door, would be a prisoner of the Regulations in their region.
These are the principles we debated in our paper.
Mr. Guimond: On page 2 of your paper, towards the middle, you say that when the Agreement on Internal Trade was signed, in 1994, the Quebec government decided to protect the Regulations on bulk trucking from the Agreement.
I'd like to try and understand what happened at that time, in order to inform my colleagues and reassure them that it wasn't the nasty Parti québécois government that signed the Agreement on Internal Trade, because it was signed long before the election of September 1994. The Agreement on Internal Trade was signed by the Quebec Liberal government of Mr. Daniel Johnson around the month of June 1994.
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Mr. Beaudet: Yes, Mr. Cherry was Minister of Transportation at the time, and we had met him. Mr. Cherry, as well as the Quebec government, had decided to uphold it to prevent social upheaval.
Mr. Guimond: In June 1994, the new government of Quebec, through the Minister, Jacques Léonard, informed the Honourable Doug Young that it was necessary to uphold the Regulations.
How was that done? Was there an exchange of letters, or a telephone call? If there was an exchange of correspondence, perhaps you could table it for the benefit of committee members.
Mr. Beaudet: We would be pleased to table these letters if the Chairman agrees. We have in our possession an exchange of correspondence, but we did not sign the letters. I'm referring to a letter from Jacques Léonard to Doug Young, and one from Mr. Young to Mr. Léonard, in which the former guarantees negotiations. However, Mr. Léonard's letter repeated the position adopted by Mr. Johnson's government, including the reasons for it.
We would be pleased to table these letters with your permission.
The Chairman: You may table them and we will distribute them as soon as we have photocopies made.
[English]
We're going to move along now to Mr. Schmidt or Mr. Mayfield.
Do you have any comments or questions?
Mr. Schmidt: Mr. Chairman, I'm intrigued by the presentation that's been made and also by the brief that I think was submitted, oh, some time ago by the Overland Group from British Columbia.
I think what has been demonstrated here is the complexity of regulations that exist among provinces. They are not standard across the provinces. While on the one hand it would appear there is almost an intrusion into provincial jurisdiction with this proposed amendment, I am wondering whether the very essence of barriers between provinces in transportation isn't precisely that difference of regulation between provinces.
One of the things that ought to be looked at is maybe not so much the elimination of that provision but rather the standardization of those regulations or, failing that, the elimination of this. That then forces some kind of standardization of regulations among provinces. I think the problem that's been raised about transport in Quebec in particular, and about interprovincial travel on the other hand, is a very real one. But I'm not sure the proposal here now - In fact, I think you're aware of the problem and that's why you'd have come up with a concrete solution.
I would really like to ask you about the solution to the problem. I think the problem has been clearly articulated. What we need to know now is what we have to do to fix it.
[Translation]
Mr. Beaudet: I think part III of the Motor Vehicle Transport Act must be amended before clause 19 is passed in order to clarify the provinces' rights. The other solution would be to withdraw it and wait until the end of the negotiations, two years from now. I don't see what else could be done.
[English]
Mr. Schmidt: Okay.
Well, Mr. Chairman, it begs the other question: is it possible the trucking industry could come up with some kind of united front that would say what would solve their problem? For example, how well do you relate to the truckers in Manitoba, in Ontario and British Columbia?
[Translation]
Mr. Beaudet: When Mr. Corbeil was Minister, federal subsidies were provided to set up a Canadian trucking cooperative. Through it, we had an opportunity to meet with carriers at meetings held in British Columbia and New Brunswick,
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There are major differences, even in the way in which the equipment is built. Some provinces provide protection for trucking themselves. I know of no regulations similar to the Quebec's Regulations on bulk trucking as regards the matters we mentioned earlier.
However, once again, at least on the part of Quebec truckers and other Quebec trucking associations, we feel a desire to support the policy regarding interprovincial trade contained in the Agreement on Internal Trade.
I don't know how the other provinces react, but we would not want them to use their extra-provincial companies to destabilize a typically local industry such as bulk trucking restricted to one permit per truck. Thank you.
[English]
Mr. Schmidt: I appreciate the problem very well. It really doesn't help very much.
It seems to me that one of the reasons why we have the provincial regulation has much to do with the restriction of the number of licences or permits that are available for such things as bulk trucking. What we really have is a pseudo, if not a de facto, marketing board type of operation going on here. An individual who wants to get an intraprovincial trucking licence actually needs to acquire one from somebody who's already in the business. As a consequence, the price of a new truck or new unit is escalated by the fact that they're buying this licence.
The field is anything but level. It's very much a different thing.
This of course involves the banking community, which then often finances these operations. So they almost value, as part of that trucking business that's now being set up, the actual acquisition price of the licence, which really is an artificial cost that's added. That complicates the issue tremendously.
How do you respond to that?
[Translation]
Mr. Beaudet: First of all, I'm not here to defend the Quebec government. It has its own spokespersons from whom we hear quite regularly.
However, I do think this is an issue that should be discussed among Quebec, federal and other provincial elected representatives. I explained the import of the Quebec legislation, but I certainly don't want to speak for all the leading lights we are hearing from these days.
[English]
Mr. Schmidt: Yes, but you are the beneficiaries of that. Don't ever kid us into thinking that you or your people weren't involved in getting that legislation to protect what is there now. That certainly exists in British Columbia, and I know that exists in Alberta, and I don't believe that didn't happen in Quebec.
[Translation]
Mr. Beaudet: It is true, Mr. Schmidt, that this is a protection for us, and that we are here to defend our interests, just as all Members of Parliament defend theirs. The difference is that to date, the Regulations on bulk trucking have not just defended our interests. They are also safeguards of the public interest, which the Quebec government and a number of other governments decided to put in place. We don't want the federal government taking over a power to which provinces are entitled.
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Mr. Bélanger (Ottawa - Vanier): I'd like to know, Mr. Beaudet, whether you have a copy of the agreement in question.
Mr. Beaudet: Yes, we have one here.
Mr. Bélanger (Ottawa - Vanier): I would like us to reach an agreement on a few points.
Mr. Beaudet: All right.
Mr. Bélanger (Ottawa - Vanier): With your permission, Mr. Chairman, I would like to read a quotation from page 149:
- Each Party shall liberalize or remove its non-conforming measures listed in Annex 1411
in accordance with that Annex.
- Motor Vehicle Transport Act, 1987, R.S.C., 3rd Supp., c. 29, Part III, effective January 1, 1988.
- We agree on this much.
Mr. Bélanger (Ottawa - Vanier): So the agreement provides that this part of the Act will be phased out in 1998. Who signed the agreement? Each of the provinces and the federal government. Do we agree?
Mr. Beaudet: Yes.
Mr. Bélanger (Ottawa - Vanier): This is a legal agreement, signed by a certain number of parties, who are adult and who knew what they were doing. You are asking us, as members of the committee, to override this agreement and remove a clause from the Bill which would mean that the government would no longer be able to live up to its commitments. That's what you are asking us to do.
Mr. Beaudet: No. When the measure was passed and humbly presented, the intent was not to remove all authority from the provinces. In fact, this is clearly stated in the preamble to the agreement:
- TO RESPECT the legislative authorities of Parliament and the provincial legislatures under the
Constitution of Canada;
- Our point is that in passing this Bill, you are killing two birds with one stone. You are creating
two classes of truckers.
Mr. Beaudet: The Regulations on bulk trucking.
Mr. Bélanger (Ottawa - Vanier): But we are in no way affecting the Regulations on bulk trucking. If the Bill is passed, and if the provision to which you referred is passed, in January 1998, in accordance with an agreement signed by all the parties, including the Quebec government, this part of the Federal Motor Vehicle Transport Act will be eliminated. So we're not touching the Quebec Regulations on bulk trucking.
Mr. Jean-Pierre Garand (Executive Vice-President, Association nationale des camionneurs artisans inc.): That's where the subtle distinction comes in. Under Article 1410, the governments that signed the agreement agreed, as regards Quebec, to protect or suspend the Regulations on bulk trucking.
The Quebec government also agreed to all the other overtures regarding extra-provincial trucking. I believe that since 1988, the Quebec government was the one that made it possible to liberalize extra-provincial trucking.
However, with respect to article 1411, which is to be removed on January 1, 1998, there is this subtle point whereby the Regulations on bulk trucking will lose effect because Part III will be phased out. It will lose its justification, because there could be two types of residents coexisting within Quebec; one group would be subject to the Regulations on bulk trucking because it is engaged in interprovincial or regional transportation only, and a second group would have an extra-provincial permit to transport goods throughout Canada.
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Let me give you an example. Let's assume that a mega project is announced tomorrow morning. A carrier in the second group would only have to say that as an extra-provincial carrier it is not subject to the Regulations on bulk trucking.
Mr. Bélanger (Ottawa - Vanier): That was the ``crafty little survivors'' referred to by Mr. Beaudet, was it not?
Mr. Beaudet: Yes.
Mr. Bélanger (Ottawa - Vanier): The problem I see is that we are attempting to crush these so-called crafty little survivors that want to get ahead, on the pretext that we are seeking to protect companies that want to work in their own region only. I don't understand at all. This does not come under federal jurisdiction.
Mr. Rocheleau: It's not the same.
Mr. Bélanger (Ottawa - Vanier): The Regulations on bulk trucking comes under provincial jurisdiction. What I don't understand - and here again, Mr. Beaudet, I'm using your words - is that a trucker from outside the province who comes into the province to truck goods in closed boxes would not have the equipment to do so, as you said yourself. So that isn't what worries you?
Mr. Rocheleau: No.
Mr. Bélanger (Ottawa - Vanier): So it's the competition in the province of Quebec that you're worried about?
Mr. Rocheleau: Yes.
Mr. Bélanger (Ottawa - Vanier): Then it will be up to the province of Quebec to settle the problem.
Mr. Rocheleau: There's going to be a federal license.
Mr. Bélanger (Ottawa - Vanier): Transportation within a province is a matter of provincial jurisdiction. If we are being asked to abolish a federal law, because of an agreement signed with the government of Quebec, I suggest that you refer the matter to the government of Quebec. We are simply going along with the will of the government of Quebec.
Mr. Beaudet: Mr. Bélanger, when I talked about some crafty guy in Quebec, I meant that in addition to a legitimate out-of-province business entitled to all the provisions of the agreement, there would also be some smart guy who might be tempted by a nice fat contract not too far from home into thinking that he is not subject to any regulation and that he can buy or lease two dump trucks and engage in the business whenever he wants without a permit. If I follow your reasoning correctly, it amounts to the elimination of provincial jurisdiction over transport.
Mr. Bélanger (Ottawa - Vanier): Come now! There's no elimination of jurisdiction within the province.
Mr. Clément Bélanger (President and Director General, Association nationale des camionneurs artisans): Mr. Bélanger, if I may, I am a trucker. If you ever decided to do that, you would be deregulating us in Quebec. Whenever there are two truckers, one who has to respect our rules and another who is not bound by them - Mr. Beaudet talks about a crafty guy. I wouldn't describe him as a crafty guy, but as an adventurer. These are people who are capable of buying equipment at any price and transporting goods by hook or by crook. We are established throughout Quebec and we have an infrastructure everywhere. And at the present time we offer competitive prices. Our rates are set by the Quebec Transport Commission and we are all small truckers. If you start applying this regulation tomorrow, it will amount to total deregulation as far as we are concerned.
In conclusion, I'd like to remind you of one small thing. Those who examined the agreement, and reference was made earlier to Mr. Johnson signing it, probably dit not take a close enough look to see where problems might arise.
Mr. Bélanger (Ottawa - Vanier): It's a question of interpretation. If I understand what you mean by deregulation, someone on this side of the river wants to engage in bulk trucking in Quebec must have a Quebec address, is that correct?
Mr. Beaudet: Yes.
Mr. Bélanger (Ottawa - Vanier): And you're saying that this requirement might be done away with?
Mr. Beaudet: No, that is not so and in any case we have no objection to it. But let me give you an example. M.J. Johnson is an Ottawa company with 15 bulk trucking permits for Quebec and it works there regularly. We have nothing against that. This company is just as entitled as any other to have permits. It has an office in Quebec and one in Ontario. And that is its right.
Mr. Bélanger (Ottawa - Vanier): Do you know, Mr. Beaudet, if a bulk trucker in Quebec is able to work in Ontario without having an office there? Can he work in Ontario without a permit?
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Mr. Beaudet: If he has another province permit, which anyone may obtain, then he can hall goods in both Quebec and Ontario. The problem relates to equipment. I was looking at your snow-removal trucks in Ottawa. In Quebec were not allowed to use this kind of truck. They cannot be driven in Quebec and the Quebec type cannot be used in Ontario. It's a problem relating to axles.
Mr. Bélanger (Ottawa - Vanier): Since the purpose of this agreement is to liberalize trade in Canada, I'm sorry but I cannot support you in your attempt.
M. Beaudet: Mr. Bélanger, we respect your opinion but this will be a fatal blow to small truckers. It will mean systematic deregulation as far as they are concerned.
In conclusion, I'd like to say that people are always in favour of deregulation when it affects others. But once you've done away with all collective agreements and all protectionist measures, we will also be willing to face the free market where the small guy is on his own. Small truckers do not have their own trucking fleet but average 1.7 trucks per trucker in Quebec. These small truckers are not in a position to operate in the free market at any price, they cannot count on a wide customer base. It isn't the same type of trucker.
You are entitled to express your opinion but what you are advocating would mean sending the truckers back to their previous difficulties in spite of the desire of all Quebec governments to uphold the Regulations. I'm convinced that when the government of Quebec signed this document, it did not intend to totally relinquish its jurisdiction over transport. It is through interpretations of the wording of the Act that there would appear to be today a consensus that transport is our responsibility. That is our opinion and we respect yours.
The Chairman: Mr. Rocheleau, one last question, a short one.
Mr. Rocheleau: Is it correct to say that what you are worried about is the application in 1998 of the agreement that was just signed? And with clause 19 what was scheduled for 1998 will apply immediately, as stated here.
Mr. Beaudet: No.
Mr. Rocheleau: That isn't what you are afraid of.
Mr. Beaudet: No, we are not afraid of that because we have the written guarantee of the Honourable Doug Young that this clause will not come into effect before January 1, 1998, even though it isn't indicated in the Bill. We place our trust in this letter and its credibility. He wrote that he would not implement it sooner and he said he was willing to negotiate with the provinces. I don't understand what the effect of negotiating with the provinces would be if there has already been a transfer of the entire jurisdiction over provincial transport under this agreement.
Mr. Rocheleau: From your knowledge of the Canadian and Quebec transport scene, what do you think motivated the federal government to propose this provision at this time?
Mr. Beaudet: We respect the aim of the Canadian government since we are all Canadian citizens and our association is not involved in politics. The reasons invoked by the Canadian government for proposing this provision are the free circulation of goods among provinces and the fact that any carrier, whatever his province of origin, would have the same rights as carriers from the province in question.
With respect to the Regulations on bulk trucking, in order to maintain this right and not give any added advantage, particularly to Quebeckers who really tipity the out-of-province category, it is necessary to uphold the bulk trucking Regulations. It is not sufficient to maintain provincial jurisdiction, which we have lost as a result of signing this agreement according to Mr. Bélanger's interpretation.
The Chairman: I'd like to thank you for your very interesting presentation.
The meeting is adjourned.