Wednesday 21 June 2000

First report on regulations, 1999
Ms Debra Paulseth, assistant Deputy Attorney General, court services division


Chair / Présidente
Ms Frances Lankin (Beaches-East York ND)

Vice-Chair / Vice-Président

Mr Garfield Dunlop (Simcoe North / -Nord PC)

Mr Gilles Bisson (Timmins-James Bay / -Timmins-Baie James ND)
Mrs Claudette Boyer (Ottawa-Vanier L)
Mr Brian Coburn (Carleton-Gloucester PC)
Mr Garfield Dunlop (Simcoe North / -Nord PC)
Mr Raminder Gill (Bramalea-Gore-Malton-Springdale PC)
Mr Pat Hoy (Chatham-Kent Essex L)
Ms Frances Lankin (Beaches-East York ND)
Mr Bill Murdoch (Bruce-Grey PC)

Substitutions / Membres remplaçants

Mr Gerry Martiniuk (Cambridge PC)

Also taking part / Autres participantes et participants

Ms Lois Lowenberger, counsel, civil justice reform, Ministry of the Attorney General

Clerk / Greffière

Ms Anne Stokes

Staff / Personnel

Mr Andrew McNaught, research officer, Research and Information Services

The committee met at 1008 in committee room 1.


The Chair (Ms Frances Lankin): I call the meeting to order. The committee is here today to consider a comprehensive response to the first report on regulations, 1999, from the Ministry of the Attorney General. Committee members will remember there were two items in that response where we were looking for reaction from two different ministries. One of those matters the committee has already dealt with; the second, an outstanding matter, is with respect to the Ministry of the Attorney General.

The committee had asked that the ministry attend before the committee during the Legislature's 2000 spring session. The ministry provided a written response in March that was circulated to committee members. Upon reading that, committee members had a discussion and determined that they wanted to proceed to have the ministry come forward and clarify.

I remind committee members of the terms of reference of our committee. Although we all want to get into policy and discuss the merits of what various ministries are doing, our terms of reference are very specific. The matter before us with respect to a Small Claims Court fee differential has been-the questions the committee has raised are, under our terms of reference, looking at regulations and the prohibition that they "should not impose a fine, imprisonment or other penalty." The discussion before us today is whether or not the regulation that the ministry has put forward in fact does constitute the imposition of a fine, imprisonment or other penalty. It is a legal argument essentially that will be presented in terms of the clarification of the intent of the ministry and the meaning of those words on the face of them.

I'm going to ask the ministry representatives to first of all identify themselves and then perhaps proceed with any presentation you would like to make. I'll then turn it over to the committee if they have questions. Would you like to begin?

Ms Debra Paulseth: Thank you, and good morning. My name is Debra Paulseth. I'm the acting assistant Deputy Attorney General for the court service division in the ministry. With me today are two other counsel: Ann Merritt and Lois Lowenberger.

Perhaps briefly, I could indicate that we are certainly here in answer to the request from the committee. We have interpreted the meaning of the term "penalty" to mean an adverse consequence for doing a prohibited act, particularly a punishment or fine for breach of a law or a rule. It was never the intention of the ministry, during any of our rationalization of fees, to impose such a consequence on people who absolutely require access to the justice system. We had understood that infrequent users are most commonly individuals or small businesses and we in fact wanted to provide them with an assurance of access to the court by giving them a smaller fee than frequent users. Frequent users are most commonly larger institutions, and it's our understanding that in 1999 that actually formed less than 20% of the claims filed with the Small Claims Court in Ontario.

The fees for infrequent users were established at a lower level to effectively increase the level of subsidy by government for individuals and for small businesses. It was felt that raising the fee for infrequent users to the full level paid by frequent users would place a considerable burden upon individuals and small businesses. We have raised the fees, as is usual, every several years under the administration of justice in an attempt to increase the proportion-certainly not the full cost, but the proportion-of revenue to cover the cost of providing access to the courts.

We would be concerned that the proposed interpretation of the term "penalty," which appears to be suggested by the standing committee's interpretation, might in fact prohibit all distinctions in treatment between different categories of persons. There are many regulations in Ontario and in other jurisdictions that create categories of individuals and impose different standards on them. We do not believe that such regulations have ever been interpreted as creating penalties within the way we have interpreted the term "penalty."

The purpose of the fee differential in the Small Claims Court, and in fact across many of our courts-the Supreme Court has a different fee and many of our Ontario courts have no fee-is to maintain the integrity of the justice system at large, and in this case in particular the Small Claims Court as the people's court.

Thank you very much for this opportunity to appear. We're very happy to answer questions or give examples of other fee differentials that we have identified.

The Chair: Thank you. I think that might be a helpful place to start, if you could give us some of the examples of other categories of users. In particular-I think it would be obvious-the concern to the committee was that the differential here was tied to a category based on volume of usage of the system as opposed to any other distinguishing factor like size of the institution versus an individual. So it appeared to have a direct relationship with the degree to which a party made access or attempted to make access to the court. If there are any other of the categories or fee differentials that could help us understand how in the ministry's mind that isn't a penalty for frequent use, for example, that would be helpful.

Ms Paulseth: Do you want to give some examples, Lois, that you've identified?

The Chair: Could you identify yourself for Hansard too, please?

Ms Lois Lowenberger: Lois Lowenberger. In response to the chairperson's question, we've identified some differential regulations but I'm not sure they specifically address the type of category that you're looking at.

For example, under the Highway Traffic Act there are differential fees for persons over and under the age of 65 years for the same driver's examination and licensing class. As you know, under social welfare legislation there are a number of categories created for access to particular types of benefits. Under the Personal Property Security Act fee structure there are differential fees for a registration period of less than 25 years or in perpetuity. I might mention also that in the Superior Court, under the Construction Lien Act, there are differential fees for filing a claim below $6,000 and above $6,000.

We've identified a range of different types of categories. I don't know if that's of any assistance to you, because it doesn't specifically address the usage argument.

The Chair: Committee members?

Mr Pat Hoy (Chatham-Kent Essex): I think you've hit it quite rightly: It doesn't address the usage factor.

The difference in fees, as I see here: Filing of a claim is 140% higher for a frequent claimant; filing of a trial date is 30% higher for a frequent claimant; entering of a default judgment is 43% higher for a frequent claimant. Ranges of 30% to 140% are a concern to some members of the committee, and perhaps all of us; it certainly is a concern of mine.

These people are seeking justice, which I see some difference in quite readily as opposed to applying for a licence to drive a motor vehicle, for example. In my riding, I've been approached by small businessmen and businesswomen who are trying to seek justice and claims through Small Claims Court and they are telling me they use this quite often. I have great difficulty in having constituents anywhere in Ontario having to pay a higher fee simply because their access to justice is required more often than someone else's.

Do you have a comment about people who are seeking justice being charged more because they happen to require that more often than, say, another individual?

The Chair: Mr Hoy, if I may, I'm going to ask you to redirect your question a little bit because, unfortunately, we're not able to deal with the merits of it. It's a question of whether or not, in this case, your constituents see that as a penalty for frequent use. That's the issue we're debating.

Mr Hoy: I'll rephrase my question. Indeed, these people do see it as prohibitive and a penalty. You give three different examples in your answer to the committee, but I believe, as do my constituents, that this is indeed a penalty. If these increased fees are not a penalty, what would you describe them as, what would you characterize them as?

Ms Paulseth: We believe that the fees established under the administration of justice are an attempt to recover a proportion of the cost of providing service to the public. I can understand that your constituents see that $145 certainly is a significant amount of money with respect to a claim. But the service provided in Small Claims Court, where the jurisdiction for that court has risen over the last 20 years to provide a faster, more informal service, is still being heavily subsidized by the taxpayers.


In most jurisdictions in Ontario, the Small Claims Court can provide a default judgment or a hearing following a dispute in the courts within six to nine months, and that is substantially better than the higher courts, the superior courts. We still believe this is a people's court and the effect of the amount of the fee has not been to reduce claimants in the system at all. That's our only response. I'm sorry.

Mr Gilles Bisson (Timmins-James Bay): Specifically to the terms of reference of our committee, I am going to go through three of them and why I think this actually is a violation of the standing orders of this committee.

The first regulation says, "Regulations should not contain provisions initiating new policy...." What in effect we're doing here is initiating a new policy when it comes to frequent users of the Small Claims Court. So that would be my first argument. A little bit later I'll get to the differentiating between an actual person and a legal person. We'll get into that later. But that's the first thing: This committee's regulations say "should not contain provisions initiating new policy." I would consider trying to levy an additional user fee to frequent users of the court as a new policy. That would be my first argument.

Section (vi) says, "Regulations should not impose a fine, imprisonment or other penalty." I think it just leads back into the first point that I made, which is that what you're trying to do here, in effect, is to create a new fine or a new penalty for frequent users of the court. I see that as an infringement-not an infringement; I guess that wouldn't be the right word. But I see that in contradiction to what the standing orders clearly say that you're allowed to do, and that's why this issue has been flagged.

The last one, section (viii), says, "Regulations should not impose anything in the way of a tax (as distinct from fixing the amount of licence fee, or the like)." We can get into the argument about a tax is a tax is a tax, for Mr Murdoch and others who were here prior to 1995. I just want to make sure the Premier and the cabinet live up to their commitment they made between 1990 and 1995, which is, "We view user fees the same as any other tax in the province of Ontario." Those are the words of the Premier: "A user fee is a tax." If I'm to believe the Premier-and I have to, because he has to tell the truth in the House; he can't lie-this is a tax. Therefore, he is taxing frequent users of the Small Claims Court system and that, to me, is a clear violation of our standing orders.

The other point I want to make-this is a fairly interesting argument that the ministry brings before us, if I can have your attention. They talk about the difference between an actual person versus a legal person, meaning that we're going to have a differentiated fee based on that sort of definition: an individual who goes to Small Claims Court because my neighbour did whatever versus a person who operates a business and is trying to recoup bad credit.

It's interesting that you bring that argument, because what I see it doing is arguing against what you're trying to do, because again you're applying a differential to those who are defined as legal persons. Again, I see that in contradiction to the standing orders.

It is clearly a new user fee-or tax, as Mike Harris likes to call it-that we're applying to people who are frequent users of the system. I see that as a creation of a new user fee or a new tax, and I see it in violation of this. I'm just interested in what your comments are, or maybe research, if they want to make comments.

Ms Paulseth: I don't know that there is any more we could add. Sorry.

Mr Bisson: You agree with me, then; that's the point.

Ms Paulseth: We don't agree with the honourable member, but thank you for your question.

The Chair: Are there any questions from the government bench?

Mr Gerry Martiniuk (Cambridge): I'm just curious. Perhaps you can educate me in regard to the fees paid in-Superior Court? They keep changing the name.

Ms Paulseth: Yes, that's true.

Mr Martiniuk: If I recall, to initiate an action was about $300.

Ms Paulseth: It was at one point. The fee now in Superior Court to file a claim of over $6,000 is $157. To file a defence in the Superior Court is $125. Further claims range between $90 and $157 for steps in a Superior Court action. I believe the fee you may be referring to is to set a matter down for trial, which is almost $300. It's $293, and the current tariff in Small Claims Court is $100, or $130 for a frequent claimant.

Mr Martiniuk: To set an action down, to get to a trial in Superior Court, the fees would run over $500.

Ms Paulseth: Oh, absolutely.

Mr Martiniuk: Would one say that fee covers the cost of administration-I'm not talking about the trial now-of the action?

Ms Paulseth: Absolutely not. It does not in any way come close to recovering the cost.

Mr Martiniuk: Let's just deal with the fees and equate that. Are the administration costs in Small Claims Court enormously lower than they are in the Superior Court?

Ms Paulseth: No, sir, they're not.

Mr Martiniuk: I see. So when we establish a fee for frequent users, does that in any way cover the administration costs of the court?

Ms Paulseth: No, sir, they do not.

Mr Martiniuk: We have established a fee for everyone other than non-frequent users, in effect, looking at the converse of what we've been discussing. What we're doing is giving a break, as I understand it, to ordinary people who are not frequently in court, who are seeking justice.

Ms Paulseth: Absolutely, that was our intention.

Mr Martiniuk: Otherwise we could have just, I assume, put a blanket fee over the whole thing as the frequent users would pay?

Ms Paulseth: That's correct.

Mr Martiniuk: Part of the policy analysis was to ensure that the ordinary citizen of Ontario who was not using the courts as a collection agency frequently would have access to it without being penalized by higher fees.

Ms Paulseth: That's absolutely correct.

Mr Martiniuk: Thank you.

The Chair: You've just caused me a great deal of problem in the answers to those questions.

Mr Bisson: I'm not ready to call it yet. I'd like to speak to that.

The Chair: Yes, and as Chair I have an option of speaking as well, so I'll come back to committee members in rotation.

If I hear correctly the answers to Mr Martiniuk's questions, you just indicated that frequent users-essentially agreeing with him-are a category of people who are seen as using the courts as collection agencies. So there's a judgment on who they are and what they're doing, which almost has the sounds of a frivolous use of the courts. You indicated that the lower fee was so that ordinary people could use the court without penalty. That was in direct answer to Mr Martiniuk's question. As I look at the letter that you have provided to us, in your own definitions the third meaning of the word "penalty" is "disadvantage, loss or hardship due to some action."

I think what the committee is struggling with here-and Mr Martiniuk couldn't have made it any clearer in that exchange-is by the classification, not of natural person or legal person, but a person who comes frequently or comes infrequently, there is an implied judgment about who that class of people is and their capacity to pay more, or perhaps the need for a deterrent for their frequent or frivolous use of the court system, if they are, as Mr Martiniuk said, simply using the court system as a collection agency.

I think the committee is going to have to grapple with whether or not, on the merits of the policy, it makes sense to have a different fee for an individual versus a corporation, whether it be a small business incorporated or a large business incorporated, but also whether you can judge a class of persons on whether they use the courts frequently or infrequently, and whether how you've structured this constitutes a penalty.

Do you want to give a response to that, particularly about your response to Mr Martiniuk, and then I'll go to Mr Hoy and Mr Bisson.

Ms Paulseth: I did not understand the question to in any way impute a judgment upon the claimants. I understood the term "collection agency" as simply an example of the types of claimants who would be subject to the frequent user fee. That was my understanding when I heard the question and when I answered it.

The Chair: I'm sorry, but if I could just take it one further, Mr Martiniuk also said that-I'm paraphrasing-he understood the lower fee for infrequent users was to give them a break so they wouldn't have to pay a penalty. You agreed with that.


Ms Paulseth: I understood him to use the term "penalty" not as a legal term but simply to elaborate upon the fact that when the ministry goes forward under regulation pursuant to the Administration of Justice Act, we must justify our fees in terms of the cost, as a proportion of the cost of providing this service, and that as fees have gone up over the years, it was felt that the fees for infrequent users should be set at a lower level in order to maintain a slightly higher level of government subsidy for individuals and small businesses, and that was consistent with the whole purpose of a Small Claims Court or a people's court.

The Chair: Thank you.

Mr Hoy: You just described a moment ago fees for Superior Court. Do they escalate with frequency of use?

Ms Paulseth: No, sir, they do not.

Mr Hoy: I suspect that the court would decide in the end whether a case was frivolous or not. I have no further questions.

Mr Bisson: Do I understand you correctly to say that the regulation has an intent to create a policy that differentiates between frequent users and infrequent users?

Ms Paulseth: The regulation does in effect differentiate, yes, at the 10-claims-per-year cut-off.

Mr Bisson: The second thing is that the policy is to initiate a policy of cost recovery.

Ms Paulseth: That is the purpose of the tariff.

Mr Bisson: Of the regulation. So the regulation that you wrote basically tries to do two things: first, to institute a policy that says, "We're going on a cost recovery basis, rather than a subsidy from the state." Right?

Ms Paulseth: I'm sorry, I don't understand the question.

Mr Bisson: I was intrigued, because you said a little while ago that the purpose of the regulation is to move the Small Claims Court to a policy where the state generally paid the administration of the court on a cost recovery basis.

Ms Paulseth: It is not anywhere close to a cost recovery basis, sir.

Mr Bisson: I understand. But what you're trying to do is move it-

Ms Paulseth: But that's how we rationalize the fees, is to understand the proportion of revenue to costs. But across the board, it is a subsidized system.

Mr Bisson: But you're trying to recover closer to the overall costs. That's the stated purpose of your policy. I come back to the first point I made, which is the first bullet under our standing order 106(h): "Regulations should not contain provisions initiating new policy." That was my argument at the beginning, that what you're doing here is creating a policy that basically says, (1) we're going to move by way of regulation to a different mindset at the ministry when it comes to fees as a recovery of costs, rather than trying to make it sort of self-sustaining, trying to make it pay for itself; and (2) creating a policy that differentiates between frequent and infrequent users. I would also view that as an infringement against what the standing orders of this committee say. I see it as a direct violation of the standing orders.

I as a committee member-and I think the government members across the way are somewhat sympathetic to what I'm saying. Number one is that we want to make sure we don't bar small business people from having access to courts, because primarily frequent users are the ones that are trying to recoup bad credit by way of small claims. We wouldn't want to put an additional burden on the small business sector. I'm sure the government members would agree. I think it would be wise for us as a committee to say, "No, we reject this regulation as being, from what we were told initially by research, in contravention of our standing orders." Afterwards, I have one little question I want to ask the presenters for the government members to comment on.

The other thing is in regard to the fee itself. Did I understand you correctly to say that the fee for individual users went down as a result of this policy?

Ms Paulseth: No, sir.

Mr Bisson: OK, because that was the impression I think people were getting in your response to Mr Martiniuk's question, which was that your policy was to lower the fees for individuals. I just want the record to show that fees did not go down for individuals as a result of this; in fact, they went up. So let's be clear.

Ms Paulseth: I'm sorry. In 1993, the differential fee was based on the amount of the claim. So, for example, under $1,000 was a $35 fee, and $1,000 to $3,000 was a $50 fee. When the increased fee schedule came in, in 1997-the issue at hand, I believe-infrequent users' fees did not change from $50. The rationalization brought in the frequent user term.

Mr Bisson: What is the fee now, just out of curiosity?

Ms Paulseth: It remains at $50 for infrequent users and it increased in the year 2000 to $145 for frequent users. But infrequent individuals and small businesses have remained at $50 since the early 1990s.

Mr Bisson: The point being that they didn't go down.

Chair, can I ask for a very short recess? Members would know that we have school tours that come in at this time of the year. I've got to go and take a picture with them, and I'll be right back. I don't want to lose this particular part of the debate, so could I ask for a five-minute recess?

The Chair: Is there unanimous consent for a five-minute recess? Agreed.

The committee recessed from 1036 to 1045.

The Chair: At this point we can continue with any questions that members have for ministry representatives who are here, and if I could ask you to keep debate separate. We can have a discussion following that, but I don't want to take more of the ministry's time than is necessary.

Mr Raminder Gill (Bramalea-Gore-Malton-Springdale): Thank you for the presentation. As we discussed briefly, I do agree with the principle, but I just want to know the mechanism of how you know who's a frequent user. When they apply for the small claim they usually go in with one claim at a time. They go to the window, if my memory serves me right, they present this claim and the clerk or whoever is there says, "This is the fee." Then they go back the next day and they go back the next day. How do they know that 10 numbers have been hit, and is it 10 per year?

Ms Paulseth: Records are kept by the court staff. They keep a record of all the claimants, and once a claimant has filed 10 claims in a calendar year, then the claimant is charged the higher fee for the remainder of his or her claims. So the first 10 certainly fall under the $50 infrequent user, and then it is over 10 that they are charged the higher fee. It starts over again the next calendar year. It is now $145.

Mr Gill: Are they using the same wicket or the same window or the same place, or can they be going anywhere in Ontario and the record is still there?

Ms Paulseth: I think it is just in the same court; it's kept in the same court.

Mr Gill: What if they go to a different court?

Ms Paulseth: I don't think we are able to track that currently, sir.

Mr Gill: Because these companies or these people who are using it frequently are not only accessing one location?

Ms Paulseth: That's absolutely true, yes.

Mr Hoy: Would you explain the rationale why you chose those persons who filed 10 or more claims in a year? What was the rationale for the number 10 as opposed to 12 or eight?

Ms Paulseth: To be honest, I don't actually recall what the various numbers were that were considered prior to 1997 and going forward with that regulation, but I can tell you what percentage of the claims in 1999 fall under the frequent user, and that was 19% of the claims filed.

Mr Hoy: Would you describe 10 as arbitrary?

Ms Paulseth: No, I can't say, sir. I'm sorry.

Mr Bisson: It's 19% of claims that are 10. Would you know, for example, if that number were 12, the percentage of users? Do you have any information like that? If it's 19% at 10, at 15-you don't have that breakdown?

Ms Paulseth: I'm sorry, we don't.

Mr Bisson: It would have been nice to see.

The other thing, of the 19% who are the frequent users, I take it by and large most of those are small business.

Ms Paulseth: No, sir. The frequent users are department stores, banks and credit agencies. They form the largest majority of frequent users. The claims are primarily found in the high-volume urban courts, and primarily Toronto.

Mr Bisson: I'm coming back at it from my experience in small business. In our court in Timmins, the people who tended to be frequent users were actually the small, independent owners, not so much the chains. Of course, I've been out of business for 15 years, so it might have changed over the years, but I know that the people who were utilizing the courts at the time I was using them were by and large small, independent owners who were trying to recoup bad credit. Where are these people going? Are they not doing credit any more?

Ms Paulseth: Primarily they send those to credit agencies now to enforce them. That is my understanding.

Mr Bisson: That's not what I'm getting. I went back and I talked-

The Chair: Mr Bisson, I'm going to ask you again to try and stay to the regulations issue. It is important to have the background information of to whom it applies, but again, although I think all of us would like to talk about the merits of this, that's not within the purview of the committee.

Mr Bisson: What I'm trying to get a handle on is what percentage of usage the small businesses are in that 19%. What's the percentage that is small business? That's what I'm trying to figure out, because that's basically who we're trying to protect here. Do you have any stats within the 19%?

Ms Paulseth: I don't think we have that information. We could try to go away and see if we could get that information in our sort of current manual system and provide it to the research officer if we could get it.

Mr Bisson: My next question will be to legislative counsel whenever we get a chance, whenever that's appropriate. I want to ask a regulatory question about our purview to make a differential.

The Chair: That's fine. We will come back to that. Just a follow-up to that question: You indicated that most small business would redirect their collections for a bad debt to a collections agency. In the exchange earlier, did I understand that collection agencies are in part one of the groups under the frequent users?

Ms Paulseth: Yes, that's my understanding.

Mr Bill Murdoch (Bruce-Grey): I just want to clear the record here that I don't think there's anybody, one person, we're trying to protect here. We're trying to protect everybody. So I don't think you want to get that on the record, saying it's just small business. We're trying to protect everybody.

Mr Bisson: I do.

Mr Murdoch: That's not the point, though. You're wrong.

Mr Bisson: I want to be clearly on the record as wanting to protect small business. The big guys can look after themselves. They've got the money to do that, quite clearly.

Mr Murdoch: I see.

Mr Gill: Just a question: Have you had any representation from these 19% of people saying that they're going to be coming up with any hardship? Have you had any correspondence from them?

Ms Paulseth: No, sir, not to my knowledge.

Mr Gill: So they are pretty well saying those are the new rules and they're going to work with them.

Ms Paulseth: Yes, sir.

The Chair: That's something, as you said, you don't have information on, or are you aware there hasn't been? Before, your answers, when you weren't sure, were that you didn't have information on that.

Ms Paulseth: My understanding is limited to letters that have come into the ministry. As well, there is a group of institutional users, collection agencies, who meet with the ministry from time to time and they have not raised this issue in some time with us.

Mr Gill: Have you had any small businesses saying they're going to have hardship by this thing?

Ms Paulseth: Not to my knowledge, sir.

The Chair: I caution committee members that you're straying off the purpose of reviewing whether the regulation falls within the purview of what a ministry can do under regulation versus what they can do under law, and that's what we need to examine. Mr Bisson, you had one more question?

Mr Bisson: I just have one question again about the percentage of those people within the 19%. Do you have a breakdown of how many of them are collection agency claims?

Ms Paulseth: I don't, sir.

Mr Bisson: Is it hard to get that?

The Chair: Are there any further questions for the ministry?

Mr Bisson: Can we get that information? That's all I'm asking.

Ms Paulseth: I don't know, and I don't know what the definition of "small business" would be. You'd have to get into that kind of research.

The Chair: Are there any further questions for ministry officials?

Mr Garfield Dunlop (Simcoe North): Madam Chair, I have no problems here. I don't see any hardships.

The Chair: Are there any questions at this point, though, because I-

Mr Dunlop: It's just that I'd like you to call the question.

The Chair: I think there should be an opportunity-if you want to put a motion to call the question, we can do that. Normally, we would afford committee members an opportunity, after having questioned the ministry, to put some views on the record with respect to this and then take a vote.

Mr Dunlop: All right. That's fine.

The Chair: Thank you very much. We appreciate your taking the time and being here with us.

As Chair, I get a read of the room that people have a sense of where they're going with this, but I think it's important that you have an opportunity at least to hear from each other and put briefly on the record your thoughts about this. Once again, I'm going to ask committee members to do their best to ensure their remarks are confined to the terms of reference under our standing orders and whether or not, in your view, the ministry can in fact effect this particular action through regulation or whether that is a violation of the guidelines, and whether or not you have a recommendation of what the committee should do next.

Just so you know the options before the committee: We can decide to take no further action; we can make a second report to the House; if we make a report to the House, we can simply have a brief presentation of what we want to say, whatever it is the committee wants to say. It can contain an additional request which would be placed on the order paper and, if called by the government, is before the House for consideration. It can contain a motion with a recommendation which would be placed on the order paper and, if called by the government, would be before the House for consideration. It could contain a motion that the report be adopted if the report has a substantive motion in it, and we can get into the details of that. Once again, it would be placed on the order paper and called for debate by the House if the government called it forward.

Those are the options before us. As you speak to this, if you have an opinion with respect to whether or not the regulation falls within or outside of the guidelines and what, if anything, you think the committee should do in response to this item before us today, I would appreciate it if you would address your remarks to that.

Mr Bisson: I have a question to counsel before we get to the rotation. I'm not sure if it's to research or leg counsel. Basically, the argument here is, does the government, by way of changing regulation, have the right to do this? Is it a violation of our order? Originally, this was flagged to us because it was seen as contradicting the standing orders in the sense that it imposed a new fee. Am I correct? That's why it ended up here.

Mr Andrew McNaught: In the sense that it imposed two levels of fees.

Mr Bisson: That's right. Two levels of fees, I should say. We heard their argument and I'm not going to repeat it. Have you in any way changed your mind at all or are you still of the view, as I am, that this is quite frankly an imposition of a new fee on a different class of user?

Mr McNaught: As I mentioned a couple of weeks ago, this issue of a penalty hasn't really been raised by the committee in a number of years, so it was a bit new to us as well when we first flagged this. We simply raised it as a potential issue. As I said a couple of weeks ago, after looking at the fuller explanation provided by the ministry, I tended to side with their interpretation on the very narrow issue of what constitutes a penalty.

Mr Bisson: That brings me then to my next question, which is that if the committee is to take the view that it certainly pushes the outside of the envelope but doesn't go over the line, would it be within the orders for us to make a recommendation, if there is a differential fee applied, that it not be applied to individuals or small business people who utilize the courts? Would that be against the standing orders if I was to make that kind of recommendation?

The Chair: The committee can make any kind of recommendation they want with respect-

Mr Bisson: But I don't want to argue against the very standing orders that we're trying to figure out, if they apply or not, if you follow where I'm coming from.

The Chair: You're asking leg counsel or leg research to make a judgment call, which is what the committee has to do. If you believe this either violates the standing orders or is borderline in terms of interpretation, the recommendation could be for the ministry to correct that problem, and if there was a majority view among committee members about how that problem should be corrected to eliminate the problem of this regulation imposing a penalty, that recommendation could be put forward by the committee.

Although the committee can do anything it wants in its majority vote, what would be wrong, in my view as Chair, would be if the committee were to attempt to comment on the merit of the policy and propose a different policy because you thought the ministry's policy was not meritorious. That's the fine line we walk at this point in time.


Mr Bisson: I know the direction I'll take, then.

Mr Hoy: Yes, you're quite right, Chair. We're being asked whether indeed this violates our standing orders-


The Chair: Could we have order? At this point, let's try and move to the discussion here.

Mr Hoy: -in two regards, one of providing two levels of fees, and secondly, does it constitute a penalty for frequent users? There are two issues in my mind.

Also in my mind, I don't think I would want to personally start to begin to categorize other persons, individuals or entities in order to somehow make ourselves feel that this is not instituting two levels of fees or somehow diluting the fact that it is a penalty by recommending that we ourselves as a committee formulate a group of persons or individuals or other entities that are exempt from the regulations. The question here is, does this provide for two levels of fees that are different, one from the other, and a penalty? I'm of the view that it is exactly that. It is exactly providing for two levels of fees to individuals, one different from the other, and does indeed constitute a penalty.

I also put heavy weight on counsel and research officers to this committee who are impartial and non-partisan. In their view, they've come to us with their judgment that I agree with, that this issue we're talking about today does create a penalty for certain individuals and most definitely does provide for two different levels of fees.

Mr Murdoch: I just want to say I absolutely agree with him, but I think we should do it anyway.

Mr Bisson: You think we should what?

Mr Murdoch: We should pass this motion, do it. I don't think there's anything wrong with what they're asking us to do. He's right, sure, there are two different fees, but there are people who use it more often. I just think we're doing what should be done. So yes, what you just said is probably true, but let's get on with it and let's do it then.

Mr Hoy: Could I comment, please?

The Chair: Every time one of you guys speaks up, you make this more complicated for the Chair.


The Chair: Mr Murdoch, I need to ask you whether or not you agreed with what Mr Hoy said, that in fact the construction of this constitutes a penalty. If I may, just to try again with the committee, whether or not you agree or disagree with what the ministry is trying to do isn't the question that we get to answer. We can debate that as politicians.

Mr Murdoch: I know. We want to know whether it's a penalty thing. I don't know whether it's a penalty or not, to be quite honest.

The Chair: If it's structured as a penalty, then the ministry can't do it by regulation under the rules.

Mr Murdoch: In fact, if it is in-so it's not a penalty. It's just a matter of setting fees to charge people for a service that they get. I say let's get on with it because I think we're wasting all our time. It's damn lucky we're not getting paid $103,000; it would be a bigger waste of time.

Mr Bisson: I am certainly sure there are a number of members in your caucus who are really pissed off right now they're not being paid $103,000. But that's another issue.

I just want to come back to the rationale for why I think this is a violation of our policies, the standing orders of this committee. I would ask that the government members pay heed to what I'm trying to explain here and hopefully, in their wisdom, they'll vote. Number one, is this a penalty or is it not a penalty? By the admission of two government members, first Mr Martiniuk in his exchange with-

Mr Martiniuk: Excuse me, Madam Chairman. At no time did I use the word "penalty." At no time. If you check Hansard, you will find that at no time did I use the word "penalty" in any way, shape or form. I'm exactly certain about that.

The Chair: Thank you, Mr Martiniuk. I will certainly take the opportunity to review Hansard. You can count on that.

Mr Murdoch: Does it matter? He's cleared it up now. He says it isn't a penalty, so that's on the record.

The Chair: It's on the record.

Mr Murdoch: That's right. That's all you need.

Mr Bisson: My point is this: Does what's before us as a committee violate standing order 106(h)? That's the question. Part of what's germane to the point is, do we consider this a new penalty? Basically, from what I heard from the government members, from Mr Murdoch in response to Mr Hoy and from what I heard earlier from Mr Martiniuk, there is an understanding on the part of the government members that this is a new penalty being imposed on a different class of business, a different class of individuals, which are the frequent users.

Mr Murdoch: A fee.

Mr Bisson: A fee, a penalty.

Mr Murdoch: It's a fee schedule, is what it is.

Mr Bisson: If you let me work my way through this, Bill, you'll get-

Mr Murdoch: No, because you-

The Chair: Mr Murdoch, I'm going to call you to order, please. I think everyone knows where we're headed here. Let's just get there. The longer that we bicker, we won't.


Mr Bisson: What is the part about democracy that you guys don't like? That's what I want to know. Anyway, I can't talk about that. I have to talk to the standing orders.

What's germane to the point is, is this regulation creating a new penalty when it comes to how it deals with utilizers of the Small Claims Court? I repeat: We heard two government members today that in fact that's what it's doing. I think there's sufficient understanding within the committee that if it doesn't go over the line, it's pretty damn close to going over the line. So that's the first point.

Then I bring you to three of the bullets within standing order 106. The first one says, "Regulations should not contain provisions initiating new policy...." My argument is we're changing the policy to where now there's going to be a differential fee charged to those people who utilize the courts more frequently. I would argue that is a new policy, that is a change of policy and therefore should not be allowed, by way of the standing orders, to be accepted.

The second one is bullet point (vi), "Regulations should not impose a fine, imprisonment or other penalty." We are clearly creating a new fine in this move, so I say again this regulation is affronting standing order 106(h).

The last one, which is a bit political, Chair, and you may rule me out of order, is, "Regulations should not impose anything in the way of a tax...." I just remind you, for the record, Mike Harris deems user fees as taxes, so therefore I want to make sure Mike Harris lives up to his commitment. It's my job as an opposition member to hold the government's feet to the fire, and I say he's breaking his own policy.

For those reasons, I think if it doesn't go over the line, it's pretty darn close to going over. At this point, Chair, if it's in order, I would like to move a motion, if I can do that.

The Chair: Yes, you can.

Mr Bisson: My motion would be that we report back to the House and we give the House one of two things that they can do. One is that they not move forward with this particular regulation in order to be able to protect small businesses and classes of individuals who use the courts, or, the other is a motion that excludes individuals and small businesses from the application of the differential fee.

The Chair: OK, there is a motion on the floor. Is there anyone who would like to speak to the motion?

Mr Hoy: I agree with the first part of Mr Bisson's motion, but I think the second part of the motion allows for a continuation to some degree of what we're seeing in terms of a penalty being there.

Mr Bisson: I'm trying to get it on both sides.

Mr Hoy: I know that you're sympathetic, Mr Bisson, as am I. But I would ask Mr Bisson if he would consider withdrawing the second part of his motion. I think it has the committee now drawing lines and getting into waters that might have us subjected to the view that we also could be putting a penalty in place for others. I think the question before us is that there not be penalties imposed by this particular ministry on any person or entity.

Mr Bisson: I see that as a friendly amendment. I just want the member to know the reason I wanted the second part of the amendment in there. It was to say if, on the one hand, we as a committee see this as going over the line but the government majority says, "No, it doesn't," then I want to use the same rule to be able to protect small businesses. I was just trying to make a point, so I'm prepared to withdraw the second part of the motion.

The Chair: As I understand it, the motion before us is for a report from committee which recommends the ministry withdraw this regulation.

Mr Bisson: That's right.

The Chair: That's what we're dealing with. Are there any other speakers to this motion? Seeing none-

Mr Bisson: Recorded vote.


Bisson, Boyer, Hoy.


Dunlop, Gill, Martiniuk, Murdoch.

The Chair: That is defeated.

If I may, in rotation, we've been back and forth a couple of times here. Is there anyone in the government who would like to speak to the general issue before us?

Mr Dunlop: No. We just have to approve the regulation, and I move it.

The Chair: At this point in time what might be helpful is if you also indicate what you want the committee to do about it. You approved the regulation. It's not really within our purview. Essentially you want the committee to take no further action with respect to this regulation. Would that be the wording?

Mr Dunlop: Exactly.

The Chair: Thank you. That's on the floor before us.

Mr Hoy: Could you just explain what was agreed to there by-

The Chair: The motion that Mr Dunlop is placing is that the committee take no further action with respect to this item, that being the regulation from the Ministry of the Attorney General.

Mr Hoy: Thank you.

Mr Bisson: Just for the record, first of all, I'm opposed to the motion for the reasons we talked about in the last meeting and this meeting. I see this as an additional tax on small businesses and individuals who are utilizers of the court. I would also make the point that the Ministry of the Attorney General people who were here earlier said the type of people who are utilizing the Small Claims Court more than 10 times by and large are collection agencies. I remind the committee, who are the customers of the collection agencies? Often it's small business people. Therefore, the $145 new higher fee is going to be passed on to small business. It's going to be in the bill that they get from the collection agencies when the matter is dealt with at the court. I see this as an additional burden on the small business community. They're under enough pressure as it is now to make ends meet.

As an owner of a small business in the past, and both my parents ran small businesses all their lives, I just want to do everything I can in order to protect that particular class of business because it's becoming increasingly more difficult, in light of global competition and competition from the bigger chains. I'm just very disappointed that the Conservatives again have sided with big corporations and not individual small business people.

Mr Dunlop: Oh, come on. Get real.

The Chair: Is there any further debate with respect to this motion? Seeing none, is there a request for a recorded vote?

Mr Bisson: Recorded vote.


Dunlop, Gill, Martiniuk, Murdoch.


Bisson, Boyer, Hoy.

The Chair: The motion carries.

Is there any other business that members-


The Chair: Thank you very much, Mr Murdoch. I had a momentary lapse there. Is there any other business that members want to bring forward? Seeing none, a motion to adjourn? Moved. Adjourned.

The committee adjourned at 1113.