Budget bill will increase service fees with less accountability, say critics

More on the government’s plans to repeal the User Fees Act and replaced it with the streamlined Service Fees Act (no changes or amendments made by the House FINA committee). The critique by Roy Cullen, the author of the User Fees Act, is revealing:

As the Liberal Member of Parliament for the federal Ontario riding of Etobicoke North from 1996 to 2008, Roy Cullen had the relatively rare accomplishment of having a private member’s bill pass with strong support in both the House of Commons and the Senate.

In 2004, Bill C-212, An Act respecting user fees, received royal assent. The bill was intended to increase accountability, oversight, and transparency for the way in which the federal government sets fees for various services, from providing Canadians with passports to giving them access to national parks.

But the government’s current omnibus budget Bill C-44 proposes to replace the User Fees Act with a Service Fees Act that would come into force next April and which would, Mr. Cullen argues, reduce public-service obligations to justify raising prices to Parliament.

His bill required federal departments and agencies to clearly explain how user fees are determined, and identify their cost and revenue elements, as well as create standards comparable to those in other countries where comparisons are relevant and “against which the performance of the regulating authority can be measured.”

The Service Fees Act is silent on those two points. It also seeks to automatically raise fees every fiscal year by the percentage change in the Consumer Price Index (CPI), which concerns Mr. Cullen.

“Some of these user fees have never been justified in a way my bill required them to be justified,” he explained in an interview this week from Victoria, where he now resides. “They’ve never undergone benchmarking to determine whether they met the performance standards identified in the legislation.”

He recalled that when he was developing the User Fees Act, several departments and agencies sought exemptions on the basis their user fees were “unique” and could not be compared against those charged in other jurisdictions. “In some cases, there was some validity to their arguments, in others, it was just a cop out,” Mr. Cullen said.

However, a 2016 internal Treasury Board document, obtained by CBC News earlier this year under the Access to Information Act, stated that 84 per cent of user fees have not been revised since the User Fees Act was passed. A subsection of the act that would reduce a user fee if it failed to meet its performance standard has resulted in a “disincentive to amend fees,” said the memo to Treasury Board President Scott Brison (Kings-Hants, N.S.), which also noted the “significant time and effort…required to prepare proposals to amend or create fees” under the User Fees Act.

“While fees have not increased over time, costs have. This resulted in an increase in the rate of taxpayer subsidies for government services that benefit private interests.”

Roger Ermuth, assistant comptroller general in the Treasury Board Secretariat, who wrote the memo obtained by the CBC, told the House of Commons Standing Committee on Finance last month that based on information from the latest available departmental performance reports, the federal government collected [in 2014-15] $1.9-billion in user fees, but the associated costs to deliver services were around $3.4-billion.

But he indicated that the goal isn’t necessarily to increase fees by $1.5-billion to close the gap.

Former federal official Andrew Griffith, who served as director general of citizenship and multiculturalism in what is now Immigration, Refugees and Citizenship Canada until his retirement in 2011, believes there has to be a consideration of the public interest in setting and hiking government fees beyond recovering the costs of providing services, as there was with the User Fees Act.

In a brief he presented to both the House and Senate finance committees, Mr. Griffith also recommended that any proposed fee increase in the proposed Service Fees Act that exceeds the annual CPI adjustment and which affects the general public, such as citizenship or passport application fees, should be referred to the relevant Parliamentary committee for review, “rather than the after-the-fact reporting required in the proposed Act.”

He said while the “User Fees Act consultation process and justification requirements may have been too onerous, the Service Fees Act goes too far by removing all meaningful transparency and consultations,” and Mr. Griffith argues that the proposed legislation could have a further impact on citizenship applications whose numbers have decreased from 198,000 in 2014 to 92,000 last year, in part, because of increasing fees, according to his analysis.

In 2014, the citizenship-application processing fee jumped from $100—a price that had remained unchanged for 20 years—to $300 and then $530 later that year after the federal Immigration Department obtained an exemption from the User Fees Act. The first increase was announced in February 2014 when the former Conservative government unveiled Bill C-24, The Strengthening of Canadian Citizenship Act, and was subject to Parliamentary review. The second hike was revealed in a Canada Gazette post just before the Christmas break in December 2014, “all but guaranteeing no one would notice at the time, and resulting in no debate,” Mr. Griffith wrote in his brief.

He added that had automatic consumer price indexing been allowed, the citizenship application fee would have only grown to $150 in 2016. Instead, an immigrant couple must pay $1,060 (plus an additional $100 right-of-citizenship fee each), and $200 for every child, to apply for citizenship.

“Over time, there will be a larger percentage of the population that will remain permanent residents unable to afford citizenship,” Mr. Griffith said in an interview.

“From a policy perspective, Canada has always had the model that we don’t just select immigrants, we try to select future citizens to fully integrate and participate in Canadian society.”

He would like to see the Service Fees Act distinguish between “public benefits,” such as for citizenship applications where the government could split the cost to provide the service with applicants, and “personal benefits,” such as for passport applications where the government could take a full cost-recovery approach in providing Canadians with the travel document.

Source: Budget bill will increase service fees with less accountability, say critics – The Hill Times – The Hill Times


About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

One Response to Budget bill will increase service fees with less accountability, say critics

  1. Pingback: Increasingly activist Senate plans amendments to Liberal budget bill — again [Service Fees Act escalator clause?] | Multicultural Meanderings

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