Canadian Underwriter

Politicians debate bill allowing federal regulations to incorporate technical standards by reference

June 12, 2015   by Canadian Underwriter

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Debate on a federal bill on incorporation into regulation by reference was postponed Thursday to Monday, June 15. Bill S-2 could potentially affect regulations that refer to standards on equipment such as hockey helmets, medical devices, electric vehicles or cloud computing, some politicians have suggested.

Bill S-2, which would change Canada’s Statutory Instruments Act, is nearly ready for third reading. It would affect federal regulations on hockey helmets, medical devices, electric vehicles or cloud computing If passed into law, Bill S-2 “would ensure that regulators continue to have the ability to use incorporation by reference, or the ability to incorporate documents as they are amended from time to time, in our regulations so that Canadians can be assured that they are protected by the most up-to-date technology without the need to amend regulations or to constantly be referring to newer versions,” Conservative MP Erin O’Toole told the Commons last October before the bill was examined by the Standing Committee on Justice and Human Rights.

 “When Parliament confers the power to make regulations, parliamentarians expect that the regulator will have the capacity to respond to diverse, complex and evolving challenges in areas where regulations have been developed,” said Dan Albas, parliamentary secretary to Treasury Board president Tony Clement, at the time of Bill S-2, the Incorporation by Reference in Regulations Act. “Consider the complexity of the areas in which regulations must now be developed. A few examples are electric vehicles, cloud computing, leading-edge medical devices and nanotechnology.”

But on Tuesday, a Montreal-area MP for the New Democratic Party, Ève Péclet, moved to amend Bill S-2. On Thursday, the question on Péclet’s motion was put to the Commons and the recorded division was deferred until Monday.

If passed into law with no changes, Bill S-2 would add a section to Canada’s Statutory Instruments Act that would stipulate that the power to make a regulation includes the power to incorporate in it a reference to a document. In the case of a document produced by a regulation-making authority, that document could be incorporated if it is “produced by a person or body other than the regulation-making authority, with any adaptations of form or reference that will facilitate its incorporation in the regulation.”

This part of the bill “poses a problem,” said Péclet, MP for La Pointe-de-l’Île, Que., on Tuesday. “What is ‘a person or body other than the regulation-making authority?’ We are talking about regulations that can be passed by the government, that do not necessarily have to be debated in the House.”

But the authority to incorporate such documents “would be more limited,” suggested Jacinthe Bourdages, the federal justice department’s general counsel and director, advisory services and legislative revision group, legislative services branch. “In most cases, those documents would only be able to be incorporated statically and only if the content of the document is limited to that which is incidental to or elaborates upon the rules already contained in the regulations. This ensures that the technique of incorporation by reference is not used to circumvent the regulatory process or to subdelegate the legislative power to government officials.”

Bourdages made her comments Dec. 4, 2014 before the Commons justice and human rights committee.

“Incorporation by reference is an effective way to tap the resources of expertise in standards in writing bodies across Canada,” O’Toole said last October on second reading. O’Toole – now Minister of Veterans Affairs – was parliamentary secretary to International Trade Minister Ed Fast at the time of the debates on second reading. His Durham, Ont. riding is east of Toronto.

Bill S-2 has advantages and disadvantages, Craig Scott, NDP MP for Toronto-Danforth, told the Commons at the time.

“When we have open incorporation by reference, without constant monitoring of the external body that may be amending its own documents, which then automatically get amended by our law because the incorporation by reference is open, there could be a serious accessibility problem,” Scott said in October. “People would not know that the standards have shifted. They cannot rely on knowing what the standard was when the regulation was adopted because incorporation by reference was not static; it was open.”

Advantages of incorporation by reference includes efficiency and the fact that regulators do not have to reproduce large amounts of material throughout the entire range of laws,” Scott noted.

Bill S-2 was initially tabled in November, 2013 by Conservative Senator Linda Frum.

“The technique of incorporation by reference is currently used in a wide range of federal regulations,” Frum told the Senate at the time. “It is used in regulations varying from those preventing the financing of terrorism, to those governing medical devices, to those that control the collection of cells, tissues and organ transplants for donation, and those governing the way that ships are built. Indeed, it is difficult to think of a heavily regulated area in which incorporation by reference is not used to some degree.”

As an example to illustrate her point, Frum suggested a regulation could stipulate “that all hockey helmets must be manufactured in accordance with a particular standard written by the Canadian Standards Association.”

In this example, a regulation would not actually reproduce the CSA text.

“Frequently, technical standards, like the one used in this example, are incorporated as amended from time to time,” Frum said. “This means that when the Canadian Standards Association makes amendments to the standard to keep up to date with changes in technology or improvements in manufacturing and science, those changes are automatically included in the regulation. In other words, the changes made to that standard are incorporated into the regulation and become law without amending the text of the regulation. This is otherwise known as ‘ambulatory incorporation by reference.'”

The bill was the subject of hearings in April, 2014 before the Senate Standing Committee on Legal and Constitutional Affairs. It passed third reading in the upper chamber April 9, 2014 and was tabled the following day in the Commons. The justice and human rights committee returned the bill last December, and it was tabled June 9, 2015 for consideration at report stage.

“There are over 275 different standards produced by the Canadian Standards Association alone that are referenced in federal regulations,” Albas said last October during debate on second reading of Bill S-2. “Added together, there are already more than 800 references in federal regulations to various types of standards, both internationally developed and developed as part of our national standards system. These are important components that help assist Canadian businesses and Canadians in how they conduct their daily business.”

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