The 2017 federal budget introduced a largely unnoticed legislative change that will have long-term implications for Canadian businesses. It overhauled the cost recovery rules that govern how federal departments and agencies set user fees charged to businesses and individuals.
The budget replaced the 2004 User Fees Act with the Service Fees Act. The Service Fees Act makes it much easier for departments and agencies to introduce and increase the fees for their goods and services. For some fees, the budget legislation went a step further and, without explaining why, exempted fees under the Food and Drugs Act from the new rules, giving the Minister of Health the authority to increase fees via Ministerial Order. These exemptions and the Service Fees Act were included in an omnibus budget bill, meaning the changes received far less parliamentary and public scrutiny than they would have as stand-alone legislation.
User fees play an important role in how departments and agencies are funded. Like taxes, they affect the competitiveness of businesses that pay them. Given the hasty implementation of changes to federal cost recovery rules, it is worth examining how the government and Health Canada, specifically, have exercised these new authorities.
The principle of cost recovery is a reasonable one: that some government goods or services should be paid by the user that benefits from them instead of from general tax revenues. When the benefit is entirely private, some fees recover the entire cost to departments of providing the service. Some fees recover a portion of the service delivery cost when there are benefits to both private interests and the broader public.
Canadian businesses are accustomed to paying fees to all levels of government to comply with regulatory requirements, including a seemingly endless number of registrations, licences and permits. Individual Canadians are also used to paying federal user fees for things such as passports and admission to national parks.
While user fees are generally not compulsory like taxes, many businesses cannot obey existing laws and regulations without paying them. These requirements are from a public monopoly, meaning there are no alternatives for businesses that are unhappy with the service or the fee. As a result, it is crucial departments
provide the highest levels of transparency and accountability in setting fees and ensure fees are strongly connected to the services they fund.
When the User Fees Act was introduced by Roy Cullen in 2002, he stated:
"It is time for parliamentarians to take greater ownership of user fees. What began as a legitimate attempt to more fully recover costs for proprietary services and goods has developed into something that is beyond that which was contemplated."
Cullen’s private members bill, the User Fees Act swung the pendulum in the opposite direction to a point where departments found the fee process too burdensome. There are signs that the Service Fees Act and the exemptions to it have swung the pendulum too far back the other way. The new unregulated approach to setting industry fees sends a hostile signal to foreign investors and companies looking to do business in Canada. Health Canada’s 2017 attempt to dramatically increase fees for drugs and medical devices gave no
consideration to business competitiveness impacts and reinforced industry concerns about the federal shift on fees.
2020 will mark three years since the passage of the Service Fees Act. Given it was drafted without
consultation and received little public scrutiny, it is an appropriate time to conduct a review of the legislation. Doing so provides an opportunity to build business confidence in the federal cost
recovery regime and ensure the Service Fees Act, like the user fee policies of the mid-1990s, does not develop into something beyond which it was intended.
The province has opened applications for two different initiatives. The first is to help Ontario farming sectors find new markets and the second is an infrastructure fund that will go toward renovations, upgrades and new construction of community, culture and recreational projects.
Agriculture and associated sectors are an important economic pillar in Peterborough City and County.
The Market Access Initiative
The Government of Canada and Government of Ontario are taking action to help Ontario food and agri-product exporters pursue new markets.
The Ontario government is accepting applications for the Market Access Initiative, a new cost-share funding initiative open to all Ontario food and agri-product exporters to assist them in accessing new markets. The Market Access Initiative will assist with diversification projects and is supported through the Canadian Agricultural Partnership (the Partnership).
"Through the Canadian Agricultural Partnership, we are investing in collaborative and innovative
solutions to industry challenges. The Government is committed to creating good jobs for our families by helping our farmers and processors in Ontario and across Canada to compete and succeed in markets at home and around the world," said the Honourable Marie-Claude Bibeau, Federal Minister of Agriculture and Agri-Food.
"The quality of Ontario's farm products has and always will be among the best in the world - and trade disputes don't change this. We're pleased to apply the Canadian Agricultural Partnership to help expand markets for Ontario's agri-food industry and to support the sector in its efforts to innovate and be open for business," said Ernie Hardeman, Ontario's Minister of Agriculture, Food and Rural Affairs.
The Partnership’s priority areas are:
The Market Access Initiative will be delivered by the Ontario Ministry of Agriculture, Food and Rural Affairs.
For more information or to access the program materials and applications forms,
visit www.omafra.gov.on.ca/english/cap/market_access.htm today, or call 1-877-424-1300.
The application intake will review applications as received and remain open until funding budgeted for the initiative is no longer available.
Investing in Canada Infrastructure Program (ICIP)
Laurie Scott, Minister of Infrastructure and MPP for Haliburton-Kawartha Lakes-Brock announced that the province is now accepting funding applications for projects under the Investing in Canada Infrastructure Program's (ICIP) Community, Culture and Recreation (CCR) stream. The funding will go towards investing in community, culture and recreational projects that will help deliver vital services for communities, foster greater social inclusion and improve the quality of life for residents across the province.
"Community centres, cultural facilities and recreational infrastructure are exactly the types of investments that make a difference in the daily lives of people across Ontario," said Scott. "We are making the investments that matter to our communities."
This program is funded by the federal and provincial governments along with eligible partners such as municipalities, Indigenous communities and not-for-profit groups, and could unlock up to $320 million in provincial funding.
The Investing in Canada Infrastructure Program (ICIP) is a $30-billion, 10-year infrastructure program cost-shared between federal, provincial and municipal governments. Ontario’s share per project will be up to 33.33 per cent or about $10.2 billion spread across four streams:
The agreement between Ontario and Canada commits $407 million in federal funding to the
Community, Culture and Recreation stream. This could unlock up to $320 million in provincial funding and up to $275 million in other partner funding such as municipalities, non-profit groups or Indigenous communities.
Investing in Canada Infrastructure Program: Community, Culture and Recreation guidelines and
application materials are available for eligible partners on the Transfer Payment Ontario website.