Hon. Colin Deacon: Honourable senators, regulatory modernization is critical. More accurately, regulatory modernization is critical if Canada wants to encourage businesses large and small to innovate and achieve productivity improvements, become a globally competitive market for innovators and deliver affordability to consumers. It’s important if we want to reduce the administrative burden for both business and government and if we want to minimize government spending.

You understand that I think it’s important, and I want to thank the government for creating the annual regulatory modernization process. I wholeheartedly support Bill S-6 and the motivation behind it. However, I want to be clear that it’s not a full-throttle regulatory modernization act. I still think it’s closer to being the legislative irritant-reduction act that I mentioned at second reading.

Canada desperately needs a major whole-of-government approach that will meaningfully address our own OECD-leading legacy of regulatory burden. We’ve got to create the regulatory agility — and a culture of regulatory agility — that will protect Canadians and spur innovation and productivity growth.

More than anything, I hope that’s what you take away from my speech. There’s an urgent need for ongoing agile regulatory reform across our economy, reform that protects Canadians and spurs innovation and productivity growth. It shouldn’t be one or the other.

In my remarks, I first want to provide three examples illustrating our substantial regulatory modernization challenges, and they’re just the tip of the iceberg. Second, I want to provide two places where government is currently excelling at consultation and reform, and third, I want to provide a few humble suggestions for moving ahead in a faster and broader way.

Here are a few glaring examples where regulation creates administrative burden, prevents innovation and is not serving consumers or market forces.

First, in the Banking Committee, we heard testimony from Electricity Canada regarding the incremental changes in Part 1 of Bill S-6, sections 4 through 8. In short, these changes were welcome but didn’t even come close to meeting the regulatory barriers currently blocking innovation, market forces and the achievement of our climate objectives.

For example, Canada’s electric metering legislation is now 40 years old. I’d say it’s in a mid-life crisis. Narrowly designed to regulate vertically integrated power utilities, it has not kept up with market developments like the advent of electric vehicles, also known as EVs, or decentralized grids. As a result, in Canada, EV charging stations can only charge for the amount of time used and not the actual amount of electricity delivered. Consequently, owners with cheaper, slower-charging EVs are subsidizing those with fast-charging EVs because they’re charged for time, not energy.

Consequently, condo and rental property managers are disincentivized from providing charging stations in their buildings. Regulatory inaction means that they cannot afford to install revenue-grade metering in their parking garages. But that actually doesn’t matter because these highly accurate revenue-grade meters, used worldwide, do not meet Measurement Canada’s strict historical regulations.

Meanwhile, the federal government is investing heavily in the increased adoption of EVs. Budget 2022 alone included another $1.7 billion in EV subsidies and $900 million to build an additional 50,000 charging stations. Yet, the hard work of modernizing the underlying regulations so market forces could support their adoption continues to be ignored.

Why does this matter? Last week, the United Kingdom ended EV subsidies because it had successfully created a mature, stand-alone market. Canada’s multi-billion-dollar investments continue. The lesson learned there, for me, is to align regulation and procurement practices to catalyze market activity and minimize the need for government investment.

Second, I want to point out a lack of effective engagement with stakeholders. The fact that it was an issue is evidenced widely but specifically in Part 8 of Bill S-6. Our colleagues on the Social Affairs Committee were told that Immigration, Refugees and Citizenship Canada officials only consulted with officials in related federal departments. Immigration lawyers, privacy lawyers and provincial governments were not consulted, although each were affected by the changes or had opinions. That’s for sure. Senator Woo spoke to the resulting information-sharing amendments that occurred in the Banking Committee.

Canadians can no longer afford for our deputy ministers to allow their officials to view their respective roles and responsibilities through the narrow lens that assumes that the customers they serve are only within government. As a result of the failure of these officials, the minister had to intervene with amendments in committee.

Canadians are counting on our professional public service to do a much better job. As Senator Smith pointed out last week, it is the stakeholders in regulated sectors who are best positioned to provide feedback on how regulation affects their organizations and the lives of Canadians.

What is the lesson learned here? Let’s require public officials to engage transparently with stakeholders in meetings where technical standards and regulations can be discussed with all affected parties in the same room, be it virtual or physical, rather than making decisions in a black box hidden away in some corner of Ottawa and then announcing the result in Canada Gazette. This process fails Canadians and only enriches lobbyists.

Lastly, the Canadian Food Inspection Agency, or CFIA, was responsible for parts 4 and 5 of Bill S-6. The lack of or limited extent of consultation was, again, an issue. But it’s not like they aren’t conducting a lot of consultations at the CFIA.

On January 21, 2022, at the high point of the potato wart crisis, the CFIA launched a 30-day consultation with Canadians on their proposed change to the size of diced white potatoes sold in cans. I didn’t realize that potatoes were sold in cans. Regardless, why on earth is the CFIA involved in regulating their cube size?

Astonishingly, as Senator Downe pointed out in his Twitter post, this occurred in the midst of the P.E.I. potato wart crisis that cost P.E.I. farmers an estimated $50 million in lost revenues. What is the lesson learned? We must become ruthless in limiting the extent of regulatory capture in Canada.

I hope these three examples give you some sense of how legacy laws, regulations and practices need to be updated to become much more agile if we want to harness innovation to create opportunities, jobs and prosperity. Simply, inaction undermines that future prosperity.

Much of what we heard in the Banking Committee was reflected in our observations, notably:

While the committee supports the intent of Bill S-6, it believes that regulatory modernization of legislation must occur more quickly and on a much wider scale than what was proposed in the bill.

The committee also suggested:

introducing an economic and competitive lens for regulations;

measuring the quantity and overall cost of regulations;

setting targets for regulatory reduction that apply to all federal legislation, regulations and policies; and

examining whether certain streamlined measures that were introduced during the COVID-19 pandemic should be continued.

I’d also like to reinforce the need for Canada’s regulations to be, first, pro-competitive, meaning that the playing fields are levelled, giving innovative new entrants a reasonable chance of challenging established incumbents; and second, that they are technology agnostic, so that changes are not needed to address accelerating forms of innovation.

Now, what about those examples of effective consultation that I alluded to? Senator Woo, in his third reading speech, asked whether the Senate might consider conducting a special study on how we can improve regulatory modernization in Canada. I, for one, wholeheartedly support this idea.

We have some recent examples of work that the federal government has already established that are setting a whole new standard for regulatory modernization. It’s not Bill S-6 that is setting the standard, but it is the consultation process that’s currently guiding the implementation of open banking and the Retail Payment Activities Act.

Both of these regulatory modernization processes have diligently involved highly effective consultations among players in an open forum alongside government officials. The groups involved are from the smallest innovative company to the largest incumbents and involve true consultation and not communication. These are models that I dream might be replicated across the whole of government.

Let me give you one small peek into the importance of the payments modernization process to give you an idea of the complexities being managed and the importance of it to Canadians. It’s currently under way as a result of implementing Budget 2021’s Retail Payment Activities Act. For context, Canadians made roughly 20 billion individual transactions in 2021, totalling nearly $10 trillion in value.

The Canadian Federation of Independent Business estimates that interchange rates for cards average at about 2%. In Europe, these rates are 0.3%, or about one seventh as much as we’re paying in Canada, due in good part to how the EU manages competition and regulation. In effect, Canada’s system is an excess tax on every single transaction made by every consumer every day, paid to the financial sector, all because our regulations haven’t kept up. Fortunately, that situation is changing, and very quickly.

The Bank of Canada has been running a consultation process to create the regulations needed to implement the Retail Payment Activities Act that will be a much more inclusive approach to how payments are managed. As evidence of how it’s going, I will quote one of the leading critics of the status quo. Laurence Cooke, Founder and CEO of nanopay:

Ten years after starting to create a safer, fairer and more competitive payments ecosystem, we finally have real traction. The Bank of Canada and the Retail Payments Supervision team set up a transparent and agile consultation process that included all stakeholders, and have set a new standard for how regulations should be created.

When Laurence said this, I had to check his health and his identity because he does not compliment regulators. The same sorts of responses were regularly heard 18 months ago during Finance Canada’s consultation process on opening banking, which is moving closer and closer to its implementation phase.

What is the lesson learned? Great examples of effective consultation exist within government. A failed consultation process can no longer be tolerated by our most senior government officials and ministers.

Lastly, let me widen the path forward. By design, regulations must protect the public from the harm created by unsafe products, underperforming services and hazardous conditions while enabling an innovative marketplace. Too often, regulatory stagnation prevents these objectives from being achieved. This happens because the world is changing around us at an accelerating pace, and our current approach to updating regulations is not keeping up.

Similar jurisdictions, including the United States, the European Union and the United Kingdom, have implemented changes to address these challenges — and they did it decades ago — by prioritizing a strategic approach to standard setting and mandating the effective use of standards in legislative instruments.

These countries have been using steadily evolving industry-led standards to complement and focus but, most importantly, not replace required regulatory efforts. Industry-led standards involve extensive and broad consultation amongst stakeholders, but through an independent expert standards body rather than a government department.

Standards establish accepted practices, eliminate unnecessary complexity and needless duplication, like the duplication we see across Canada and the regular conflict across this country because of competing jurisdictional authorities in here.

Governments around the world have turned to combining legislation, regulation, standards and certification programs as the go-to compliance mechanism for managing traditional sectors as well as high-risk emerging technology. Canada does not as yet.

Here are three very specific things that Canada could do to accelerate the intention of Bill S-6 based on the advice that I’ve received from standards-setting organizations.

First, enact Governor-in-Council powers to list recognized standards, codes of practice and certification programs for the regulations it administers to provide sufficient, up to date and relevant safeguards.

Second, establish a national secretariat to facilitate cooperation amongst federal, provincial and territorial authorities with jurisdiction in the establishment, harmonization and maintenance of recognized standards across jurisdictions.

Last, update the Cabinet Directive on Regulation to limit regulations to essential requirements and require regulations to be technology agnostic.

We’re seeing evidence of the government moving in this direction. It just incorporated language in new legislation supporting the use of standards necessary to secure critical infrastructure. That’s in section 15.2(2)(l) of Bill C-26, recently introduced and called the “Critical Cyber Systems Protection Act.” This inclusion helps de-risk regulatory policy and ensures that relevant, up-to-date safeguards are implemented to reflect contemporary realities.

It also fits with expert testimony provided at the Standing Senate Committee on Legal and Constitutional Affairs in March 2022 when studying Senator Miville-Dechêne’s Bill S-210. The recommendation was to enact Governor-in-Council powers to recognize standards, codes of practice and certification programs as a way to provide sufficient safeguards.

Colleagues, I want to conclude by reminding you that an acceleration of our ability to update critical standards and regulations protects our future prosperity, our sovereignty and our security, consumers and accelerates our ability to address the challenges and opportunities of our ever-changing world.

At a time when the federal government is making so many major strategic investments in digital infrastructure and modernization and in fighting climate change, understanding both past design failures and emerging models for success is critical. The Senate can help, as Senator Woo suggested. There is much more evidence out there to guide us in broadening Canada’s regulatory modernization efforts well beyond Bill S-6. Thank you, colleagues.

Hon. Marc Gold (Government Representative in the Senate): Thank you for your question, senator. The government believes that contractors and subcontractors in the construction industry deserve to be paid promptly. Regarding the specifics of your question, I will have to make inquiries with the government and report back to the chamber.

Hon. Paul J. Massicotte: Honourable senators, I have the honour to present, in both official languages, the third report of the Standing Senate Committee on Energy, the Environment and Natural Resources, which deals with Bill S-5, An Act to amend the Canadian Environmental Protection Act, 1999, to make related amendments to the Food and Drugs Act and to repeal the Perfluorooctane Sulfonate Virtual Elimination Act.

(For text of report, see today’s Journals of the Senate, p. 752.)

Hon. Pamela Wallin: Honourable senators, I have the honour to table, in both official languages, the fourth report (interim) of the Standing Senate Committee on Banking, Trade and Commerce entitled Business investment in Canada and I move that the report be placed on the Orders of the Day for consideration at the next sitting of the Senate.

(On motion of Senator Wallin, report placed on the Orders of the Day for consideration at the next sitting of the Senate.)

Hon. Percy Mockler: Honourable senators, I have the honour to table, in both official languages, the fifth report of the Standing Senate Committee on National Finance entitled Supplementary Estimates (A) for the fiscal year ending March 31, 2023 and I move that the report be placed on the Orders of the Day for consideration at the next sitting of the Senate.

(On motion of Senator Mockler, report placed on the Orders of the Day for consideration at the next sitting of the Senate.)

[Translation]

Hon. Salma Ataullahjan: Honourable senators, my question is for the government leader in the Senate. The Information Commissioner’s 2021-2022 Annual Report shows a 70% increase in complaints over the previous year: the highest volume of complaints since this office was created almost 40 years ago in 1983.

Commissioner Maynard stated, “A number of institutions are not meeting their legislative obligations, while some appear to consider them as optional.”

The commissioner says that the pandemic can no longer be used as an excuse for failing to live up to these obligations.

Leader, your government came to office promising openness and transparency. Instead, under your watch, access to information is now arguably the worst it has ever been. What will you do to address the crisis in the system for access to information across your government?

Senator Ataullahjan: In a report released in April, and again in an annual report last week, Commissioner Maynard made specific mention of the excessive delays for access to information requests at Library and Archives Canada, where almost 80% of responses do not comply with the timelines laid out in the legislation. The commissioner is very critical of Minister Rodriguez in her reports, saying she is not convinced the minister has an understanding of the critical situation at Library and Archives Canada. As well, the commissioner said the minister’s response to her recommendations lacked any sense of urgency and in some cases did not even address her recommendations.

Leader, the commissioner says Minister Rodriguez won’t commit to anything other than the status quo at Library and Archives Canada, which she finds wholly inadequate. How will the delays ever be resolved if the minister doesn’t even realize there is a problem?

Hon. Marc Gold (Government Representative in the Senate): Thank you, senator, for the question. Indeed, transparency, accountability and openness, these are guiding principles that the government strives to promote. It has invested over $50 million in additional funds to improve access to information, and is engaged in a review of its access to information process to explore opportunities to improve proactive publication, improve services and reduce delays. I am also advised that deputy heads have been reminded of their obligations under the law, and are being held to account to ensure they respond appropriately to requests.

Hon. Pat Duncan: Honourable senators, my question is for the Government Representative in the Senate. Senator Gold, tomorrow marks three years since Bill C-97, Budget Implementation Act, 2019, No. 1, received Royal Assent in this chamber. Section 387 of that act, the Federal Prompt Payment for Construction Work Act, is still not in force.

Do you have any indication of when this act will come into force, and do you have any information as to what’s holding up the proclamation of this act?

Senator Gold: That’s a good question, and I don’t know specifically the degree or extent or involvement of Indigenous Services with the drafting of this bill. Again, I expect that answer will be easily available at committee.

You raise a larger point, and I raised it in my speech but it bears repeating. We’re dealing here with a situation when we’re focusing on the overrepresentation of Indigenous offenders and those from racialized communities. We are focusing on the criminal justice system, but there is a whole world and history that has led us to this place, and we know it. We, in the Senate, know it well. The Aboriginal Peoples Committee knows it well, and there has been work done on the United Nations Declaration on the Rights of Indigenous Peoples.

We also know, to your point and as I mentioned in passing, that the success of any of these measures depends upon a whole-of-society approach to address our history, and in some cases what is required clearly, as you pointed out quite correctly, is resources: it’s funding. It’s fine to have a diversion program if you are in downtown Toronto or Montreal, but if you are in a much more remote area where there are no resources, no treatment centres, no appropriate facilities, then it is a hollow promise. There have been investments. There need to continue to be investments at the federal, territorial and provincial levels, and within First Nations communities and others.

There are all kinds of ways to capture the idea to not let the best be the enemy of the good. In this case, we have a societal problem and a history that we are trying to tackle. It will take time and generations, perhaps, but every step in the right direction — and this is a step in the right direction in my humble opinion — is worth taking and celebrating. This should be done without fooling ourselves, however, that it is a panacea and without ignoring all the other supports — financial, social and others — that need to be put into place to make this a lived reality and make the improvements in the justice system tangible for Canadians.

Hon. Donald Neil Plett (Leader of the Opposition): Honourable senators, my second question, again, is for the Leader of the Government in the Senate.

Leader, it concerns Health Canada’s proposed warning label for ground beef and pork, which I raised with the Minister of Agriculture earlier this month at a Committee of the Whole. When she was in the chamber, Minister Bibeau said:

The final decision hasn’t been taken yet, but you can count on me to always advocate for our producers with my colleague the Minister of Health . . .

During Question Period in the House of Commons earlier today, it sounded very much as though a decision has been taken and our beef producers were right, leader, to be worried. In Question Period, the Parliamentary Secretary to the Minister of Health defended these warning labels, indicating Canadians will now have a choice to make an informed decision to limit their saturated fat. Leader, could you confirm that your government is going ahead with warning labels on ground beef and pork?

Hon. Marc Gold (Government Representative in the Senate): Thank you for your question, Senator Plett. No, I am not able to confirm that. To the best of my knowledge, the decision has not formally been taken. However, I can confirm that the government remains committed to providing Canadians and consumers with the information all Canadians deserve to have with regard to the benefits and possible consequences of the food they consume. That would include foods that are high in saturated fat or others that may cause, if eaten in too great a quantity or concentration, some health consequences — at least for some Canadians.

Senator Plett: One thing we can be assured of in your answers is that the government is always concerned. They don’t show that, leader.

As I said, regardless of what the minister said earlier this month, it sounds like the deal is done. Our beef and pork producers and their livelihoods are again being thrown under the bus for an incoherent, inconsistent Trudeau government policy.

Leader, if the Trudeau government slaps a warning label on Canadian ground beef and pork, it will be the only country in the world to do so. I find it strange that there isn’t another country in the world that seems to care about the health of Canadians — only our government. Leader, what do you think that will do to our beef exports worldwide? Last year, Canadian beef exports were worth about $4.5 billion. Do you think a warning label will help our beef exports or hurt them?

Hon. Marc Gold (Government Representative in the Senate): Again, thank you for your question. I don’t have the answer to the amounts that have been contributed through that program.

The government does care. The government is working with the agricultural sector to address the rising input costs and the consequential impact those costs are having on producers. Some of this is beyond the control of any government, being international in nature. However, the government is committed to working with the agricultural sector so as to support them and so that they in turn can not only support the needs of Canadians but flourish as an important industry that contributes to our exports in the world.

Hon. Raymonde Gagné (Legislative Deputy to the Government Representative in the Senate): Honourable senators, pursuant to rule 4-13(3), I would like to inform the Senate that as we proceed with Government Business, the Senate will address the items in the following order: second reading of Bill C-14, followed by second reading of Bill C-5, followed by third reading of Bill S-7, followed by Motion No. 49, followed by all remaining items in the order that they appear on the Order Paper.

[Translation]

Senator Simons: Much like Senator Jaffer and Senator Pate, I think there is so much tremendous potential in this bill, and you have made an eloquent case for why this is an important and necessary first step.

However, will there be any kind of commitment from the government to use this as a beta case to see how well these changes work and to build upon that and consider a second tranche of charges? Once we have proof of concept, will there be any kind of expectation that the government will build upon this foundation to offer more judicial discretion for the next range of charges?

Hon. Jane Cordy: Honourable senators, yesterday, on Sunday, June 19, we celebrated World Sickle Cell Day and National Sickle Cell Awareness Day in Canada. The recognition of this day has been extremely important and meaningful to the sickle cell community in Canada. Not only does it bring awareness to the disease, but it allows us to celebrate advancement in sickle cell care and it encourages momentum for the work that is left to do.

Since first becoming involved with the sickle cell community through an advocacy event on Parliament Hill in 2013, I have come to know many sickle cell patients, caregivers, supporters and advocates. They speak passionately about their experiences and best next steps to support Canadians living with this disease. The goal is to develop a national strategy for early sickle cell detection and sickle cell care. Honourable senators, I believe this is an achievable goal.

While sickle cell disease is inherited and can affect anyone who has both parents with a sickle cell trait or sickle cell and another hemoglobin trait, it is primarily found in people who are Black, Southern European, Middle Eastern or of Asian-Indian ancestry. It is therefore important to note that systemic racism in health care is, unfortunately, a reality for sickle cell patients. Individuals who present at Canadian hospitals with pain are sometimes treated as drug seekers when compared to their non‑racialized counterparts. Racial injustice in health care must be stopped. The Sickle Cell Awareness Group of Ontario have committed themselves particularly to equitable access to comprehensive standard care across the province.

To those who work so diligently on behalf of Canadians with sickle cell disease, I want you to know that your work, energy and enthusiasm are valued. I would like to express my deepest thanks to Lanre Tunji-Ajayi, Biba Tinga, and Rugi Jalloh for the work they have done and the work they continue to do. I also extend my thanks to MPs Darren Fisher and Dr. Kirsty Duncan for their advocacy for those with sickle cell disease and their families. They work tirelessly to keep sickle cell disease and the needs of those with sickle cell at the forefront. Honourable senators, it seems like most days out of the year are linked to recognizing some particular event or disease. It would be easy to dismiss such bills as frivolous; I assure you, they are not. They mean something.

When National Sickle Cell Awareness Day was passed in 2017, the community was overjoyed. Each new person who is made aware of this disease, donates blood or advocates for legislation moves the needle slightly and allows us to better care for Canadians struggling with the disease. This is the reason that on June 19, we celebrate. I encourage you to take some time to learn about sickle cell disease and to meet and speak with those affected in your communities. I have no doubt you will be as touched by their passion as I have been. Thank you.

[Translation]

Senator Gold: Thank you for the question. Again, these questions are best answered — you can ask them to me; everything is fair game — by the officials who have it.

I used the example to illustrate the point, senator, that in every circumstance, especially dealing with weapons as opposed to prohibited firearms, handguns and the like, there are possibly a range of circumstances.

The point to emphasize is that if circumstances like that arise, then we want judges to have the discretion to do the right thing. It’s true; you quite properly point out that police have discretion; prosecutors have discretion. It’s also true, painfully true, that this discretion is not always exercised in an equitable way in dealing with certain offenders, racialized offenders, Indigenous offenders.

What Bill C-5 does is to give to the judge — who is faced with a decision that has been made by police, by prosecutors, to lay a criminal charge in the case of a prohibited weapon — the discretion to tailor the sentence to the circumstances of the case. That is what judges should do, and I think that’s why Bill C-5 is worthy of our support.

Senator Gold: Thank you for the question. It’s clear that the bill was guided by the need to give judges the ability to appropriately apply the Gladue principles.

The bill is also clearly a response to the real and shameful problem of overrepresentation of Indigenous women and Canadians from marginalized communities in prisons.

At second reading, the objective is to present and debate the principles of the bill, and, if the Senate so desires, to support the bill. The next step would be to refer it to committee, which can then get to work, delve into the details, and call the minister and his officials to testify and answer more specific questions.

I encourage you to participate in the process. All senators have the right to attend and participate, even if they are not members of the committee. This is how we can adequately respond to your valid and legitimate questions.

[English]