Consultation summary—Regulatory proposals related to administrative monetary penalties and mandatory periodic examinations

Table of contents


1.0 Purpose

Measurement Canada conducted a consultation to obtain stakeholder feedback on regulatory proposals required to implement the amendments made to the Electricity and Gas Inspection Act and the Weights and Measures Act. The purpose of this document is to provide a summary of the feedback that Measurement Canada received during the consultation.

2.0 Scope of consultation

The external consultation focused mainly on the following regulatory issues:

  • Mandatory periodic examinations under the Weights and Measures Act.
  • Administrative Monetary Penalties.
  • Regulatory exemptions and other issues related to the implementation of trade sector review recommendations.

3.0 Executive summary

On September 9, Measurement Canada completed a consultation on regulatory proposals that resulted from amendments made to the Electricity and Gas Inspection Act and the Weights and Measures Act.

The regulatory proposals addressed:

  • Administrative Monetary Penalties (AMPs) under both the Electricity and Gas Inspection Act and the Weights and Measures Act.
  • Proposed mandatory examination frequencies for eight initial trade sectors under the Weights and Measures Act, including a mechanism for implementation.
  • Other minor issues related to the implementation of trade sector review recommendations.

The feedback received was generally positive and included many comments related to implementation issues (i.e., non-regulatory issues) and questions to seek clarification. Full endorsement of all regulatory proposals was received from at least 50 percent of the stakeholders who provided feedback, through a second sample of 427 stakeholders.

There was some feedback provided regarding mandatory examinations under the Weights and Measures Act, which will be used to improve the regulatory proposals.

Some regulated parties expressed concern about the implementation of AMPs.

Consumer associations were very supportive of the regulatory proposals.

Key stakeholder feedback:

  1. Reduce the proposed interval between mandatory examinations in the retail food sector from five to two years.
  2. Reject the proposal to exempt devices used exclusively for measuring activities inherent to trade in the forestry sector from the Weights and Measures Act, with the exception of weighing devices.
  3. Increase the prescribed payment period for AMPs to render it consistent with the current financial practices of some organizations.
  4. Provide clarification on the administrative process to be followed in the application of a penalty to large device populations.
  5. Ensure an impartial and objective review of AMPs, as well as a uniform and consistent application across Canada.
  6. Allow for a two or three-week window around the implementation deadline for mandatory examinations in the case of examinations that can only be conducted at specific time periods due to environmental factors.

The key feedback noted above, additional comments and the way in which Measurement Canada will address them will be covered in the following summary.

4.0 Background and methodology

From June 20, 2011 to September 9, 2011, Measurement Canada conducted a stakeholder consultation on regulatory proposals that resulted from legislative amendments made to the Electricity and Gas Inspection Act and the Weights and Measures Act.

Highlights of the legislative amendments include:

  • Providing the Government with the authority to require that measuring devices subject to the Weights and Measures Act be examined (i.e., inspected) at regular intervals.
  • Allowing for the use of non-government inspectors to perform examinations pursuant to the Weights and Measures Act (government inspectors will remain responsible for enforcement activities).
  • Increasing court-imposed fines under the Electricity and Gas Inspection Act and the Weights and Measures Act up to $10 000 for minor offences, $25 000 for major offences and up to $50 000 for repeat offences, thus providing greater deterrence against measurement inaccuracy and improving consumer protection.
  • Introducing AMPs under both the Weights and Measures Act and the Electricity and Gas Inspection Act.

Initial outreach to external stakeholders was conducted by means of Lyris email (Lyris is the messaging system used by Measurement Canada to contact stakeholders). Approximately 1300 stakeholders were contacted in this way.

In order to ensure that stakeholders not subscribed to Lyris were reached, another sampling of approximately 427 stakeholders was conducted. The sample was selected from trade sector review contact lists maintained by Measurement Canada. For the second sample, follow-up phone calls were made to clarify questions and better explain the content of the proposed regulations.

Although the consultation was open ended, it focused on the two most significant regulatory changes, as stated in the scope section of the consultation material posted on Measurement Canada's website during the consultation period. Feedback was received on the following topics: mandatory examination frequencies, the roll out of examination frequencies, exemptions, marking requirements and AMPs (including penalty calculation).

Most feedback was received by email, although some was obtained by telephone.

Comments received were sorted by individual topics to better assess the frequency of themes. The summary of the feedback is contained in section 5 of this report, based on the described approach.

5.0 Results

The following sections provide a summary of the feedback received, as related to each specific item or topic that was part of the scope of this consultation.

The topics are listed in decreasing order, according to the amount of feedback received. Comments from stakeholders appear in italics and are followed by a brief explanation of Measurement Canada's decision with respect to them.

5.1 Mandatory periodic examinations under the Weights and Measures Act

5.1.1 Frequency of mandatory examinations

Much of the feedback received was related to the proposal to avoid unnecessary device examinations as periodic examination cycles are introduced (proposal C-2 of the consultation document) and the proposal to establish the maximum time period between periodic examinations (proposal B-1).

Two respondents stated that there should be a two or three-week window around the deadline, especially in the case of inspections (examinations) that must be conducted at specific time periods (i.e., April/May and October/November) due to environmental factors.

Stakeholder feedback:

Some stakeholders felt that examinations in the retail food sector should be conducted every two years instead of every five. It was also stated that the frequency of examinations for fluid measuring devices should be once a year. It was felt that Measurement Canada should consider these new examination frequencies.

Measurement Canada's proposed examination frequencies are based on stakeholder consensus reached through trade sector reviews. For this reason, it has been decided that examination frequencies will not be changed at this time.

5.1.2 Exemptions

Some stakeholders strongly stated their concerns regarding proposal G-5, which was to exclude devices used exclusively for measuring in commercial applications in the forestry sector from the Weights and Measures Act, with the exception of weighing devices.

It was stated that the forest industry and provincial authorities rely on the expertise and regulatory authority of Measurement Canada. Log scanners were cited as one of the device types that should not be exempted.

Stakeholder feedback:

It was stated that Measurement Canada should not exempt from its control all measuring devices used by the forestry sector.

Measurement Canada held discussions with stakeholders such as the Canadian Standards Association and provincial ministries of natural resources. The comments received were useful in determining Measurement Canada's level of intervention in the forestry sector, and they have convinced Measurement Canada that it should continue to evaluate its role with respect to devices such as log scanners.

Measurement Canada has therefore decided to set aside proposal G-5 from the proposed amendments to the Weights and Measures Regulations.

Measurement Canada will however maintain proposal G-2 (which relates to static linear measures) and will continue to evaluate the need for the approval and examination of log scanners and other measuring devices used in trade in the forestry sector. For the time being, these devices will continue to be governed by the Weights and Measures Act. Static linear measures will be exempt from these same requirements.

Measurement Canada will also work with stakeholders in the development of specifications, standards and examination procedures relating to these measuring devices, should the result of its evaluation indicate that these devices are used in trade and need to be regulated.

5.1.3 Examination stickers

The comments in this area were centered around the actual content of examination stickers and their placement on examined devices.

Stakeholder feedback:

  1. It was stated that Measurement Canada should consider setting more specific requirements regarding the place on a device where the examination sticker is to be affixed.

    It is by design that proposal E-4 (proposal to amend paragraph 30(1)(a) of the Weights and Measures Regulations) merely requires that the label be affixed on the device in such a way that it is visible to the customer and the owner.

    Indeed, to be effective, the regulatory requirement cannot require an exact positioning of a label considering the number of models and types of instruments. With all the variables that would need to be considered in order to choose a specific place that could apply to all categories, types and models of devices (fuel dispensers, conveyor scales, grocery store scales, truck scales, multidimensional devices, etc.), such a requirement would quickly become an administrative burden and an obstacle to innovation. It is for these reasons that Measurement Canada could not feasibly implement this proposal.

  2. It was stated that Measurement Canada should require that a bar code containing specific information regarding the device model and next examination date be included in the examination sticker.

    Adopting this proposal would exceed the objective of the Regulations and would require setting up an infrastructure that exceeds what is needed in order to implement the Weights and Measures Act. It would also be a burden in terms of financial resources and maintenance. Measurement Canada has therefore decided to limit itself to the original regulatory proposal.

  3. It was stated that examination stickers should be required to include easily remembered contact information such as an email address or a phone number at which Measurement Canada could be reached in order to submit complaints or comments.

    Although the size of the examination sticker is limited and the sticker already includes the minimum required information, the impact of this proposal on Measurement Canada and Authorized Service Providers (ASPs) will carefully be studied. A decision on its implementation will be communicated at a later date.

    Measurement Canada believes that it can easily be reached through its website, the address of which is easier to remember than an email address or a telephone number.

  4. Measurement Canada should consider situations in which a sticker bearing the examination mark is bigger than space available on the device, and it may not be feasible to use that available space.

    Measurement Canada will address this proposal by way of an amendment to paragraph 29(3)(a) of the proposed regulations. This comment deals with a situation that was not captured in the original regulatory proposal.

5.1.4 Feedback on regulatory proposals

Approximately 29 percent of comments and questions were related to the proposed regulations. Many questions were answered and comments addressed without the need to introduce changes to the original regulatory proposals.

Some of the questions asked were about the difference between a trader and an owner as well as about granting extensions of the periods between device examinations. A stakeholder inquired about the accuracy of the postal code tables; this prompted an in-depth review and adjustment of the same.

5.1.5 Implementation

The topic of implementation received the third highest amount of feedback. It should also be noted that this topic is not related to regulatory issues.

Most stakeholders had comments and suggestions based on the proposed regulations described in the consultation material. Approximately 12 percent of the feedback received dealt with implementation. Most comments and questions were responded to directly with the stakeholder who provided the feedback.

An Authorized Service Provider had concerns regarding the cost of restocking verification stickers and how they would deal with the thousands of stickers they have already purchased.

Stakeholder feedback:

  1. It was stated that MC should develop an aggressive ASP recruitment and certification process to help ensure that stakeholders can procure the resources they need to comply with the Regulations.

    It is quite understandable that stakeholders would be concerned about ASP availability. In preparation for the implementation of these legislative and regulatory amendments, Measurement Canada has recognized this concern and will continue to monitor ASP growth and make it one of its priorities.

  2. Implement a mechanism to update the examination sticker. In the event an extension is granted, consumers will see the extended deadline.

    Measurement Canada is considering this proposal and investigating alternatives that would allow traders to show consumers that an extension has been granted. This could take the form of a sticker, as suggested, or could also be as simple as displaying the letter issued by Measurement Canada granting the extension.

5.1.6 Stakeholder education and communication

Some of the stakeholders inquired about how Measurement Canada will communicate regulatory changes and make all stakeholders (including traders and device owners) aware of the new regulations and their impact on them. Some stakeholders even went so far as to invite Measurement Canada to present at their association meetings.

Stakeholder feedback:

It was stated that a very strong, clear, multi-pronged communications strategy should be developed and that trade associations such as the Canadian Independent Petroleum Marketers Association (CIPMA) should be included in communications planning and execution.

Measurement Canada had already envisioned the development of a multi-pronged communications strategy, which will include issuing public notices and publishing articles in industry or association newsletters. Measurement Canada will also be seeking to take advantage of gatherings such as annual meetings of associations to present on the legislative and regulatory amendments. Measurement Canada plans to take advantage of the regular stakeholder meetings held by its regional offices to discuss implementation of these changes.

5.2 Administrative monetary penalties

5.2.1 Implementation

Most stakeholders made comments and suggestions on the AMPs proposed in the consultation material. Approximately 23 percent of the feedback received dealt with implementation.

  1. Notice of violation issuance:

    The proposed approach of using a traditional enforcement tool such as a notice of non-compliance prior to issuing a notice of violation generated questions regarding the process to be followed, timelines for responding to warning letters and inclusion of the actual process in the regulations.

    Stakeholder feedback:

    1. Include an outline of the graduated enforcement approach in the regulations so that traders have an understanding of the process.
    2. Implement a procedure for issuing a notice of non-compliance, prior to issuing a notice of violation.
    3. Include in the regulations a requirement for a written warning with a fifteen day remedy period, before the issuance of any notice of violation.

    Measurement Canada recognizes the importance of these suggestions and will consider their implementation. However, as they refer to administrative and procedural processes, they will be left out of the regulations. Instead, these suggestions will be implemented through the application of policies and procedures for the administration of AMPs.

    Defining a graduated enforcement approach in the regulations, as suggested in I. above is not feasible as it would be too cumbersome. Furthermore, this approach has not been defined in any AMPs regulations that Measurement Canada has assessed. Documented policies and procedures will allow for an effective implementation of a graduated enforcement approach, which is in line with those taken by other government departments.

    Including a period of time in which to correct an instance of non-compliance, as stated in II. above, is in line with the proposed graduated enforcement approach.

  2. Review of administrative monetary penalties:

    The ministerial review process generated some questions regarding adjudication and proper communication of the actual process to stakeholders.

    Stakeholder feedback:

    The appeal process should be clearly articulated in the regulations, to ensure that all parties are fully aware of this important part of the system.

    Measurement Canada will be implementing this proposal as required by the enabling legislation. An explanation of the appeal process will also be included in communications material regarding AMPs.

    The regulations will have a specific section that deals with the appeal process. Furthermore, as part of trader/owner education, Measurement Canada plans to make available communications materials that state in a clear manner the options available to recipients of a notice of violation, including but not limited to, the appeal process.

    The enabling legislation also requires that the options available to notice of violation recipients to help them deal with the identified violation be stated in simple language in the notice.

5.2.2 Overall reaction to proposed regulations

Nineteen percent of the feedback obtained was very positive and indicated support for the proposed AMPs.

Some stakeholders stated that they had no issues with the proposed changes, while others stated that they had reviewed the proposed changes to the Weights and Measures Regulations, and felt that they are acceptable from their perspective. On the other hand, some stakeholders felt that the regulations could have gone further in dealing with current meter owner practices, when it comes to disputes.

5.2.3 Feedback on proposed regulations

Approximately 18 percent of the feedback received dealt with AMPs, the terminology used, questions about what a violation is, the difference between a fine and a violation, and how the graduated enforcement approach would apply to an accredited organization.

Answers were provided directly to the organizations that provided feedback.

5.2.4 Issuance of notices of violation

Fifteen percent of feedback dealt with comments about the process for issuing notices of violation. Measurement Canada will not delegate enforcement powers to ASPs. The enabling legislation only allows federal government employees to issue a notice of violation.

Stakeholder feedback:

  1. An explicit statement to the effect that ASPs will have no enforcement authority under the proposed regulations should be included.

    An ASP cannot be delegated the authority to issue a notice of violation. Because this is covered in the amendments to the Weights and Measures Act, subsection 16.1(2) and in the Electricity and Gas Inspection Act, section 26, subsection 5.1, Measurement Canada does not see the need to further address this topic in the regulations or administrative processes.

  2. Notices of violation should only be issued following a review by a Measurement Canada Manager.

    Measurement Canada will be implementing a process that will allow for uniform and consistent application of AMPs. It is possible that the submitted proposal may fit within that process.

  3. No notice of violation should be issued as a result of compliance sampling if the public utility has exercised due diligence by following compliance sampling plans and/or other mandated protocols, and has taken reasonable steps beyond these to ensure compliance.

    Measurement Canada's processes for issuing a notice of violation will include a review of the facts, in order to ensure that the efforts of a regulated party to comply are taken into consideration.

    A due diligence defence is also established in the amendments to the Electricity and Gas Inspection Act, section 29.2(1) and to the Weights and Measures Act, section 22.19(1).

  4. There should be no penalty applied to a meter found outside the limit of error (LOE).

    One of the most important aspects of Measurement Canada's mandate is accuracy. Measurement Canada recognizes that when devices are outside the LOE despite the exercise of due diligence, a notice of violation should not be issued. It is also recognized, however, that due diligence is not always exercised. Measurement Canada will therefore take a case-by-case approach.

5.2.5 Adjudicative process

The enabling legislation has identified the Minister as the person responsible for the reviews (i.e., appeals) and compliance agreements.

Stakeholder feedback:

One industry association stated that reviews could be performed by an independent body, while another stated: "… regarding ministerial review and oversight, we recommend that the Minister delegate an individual or team to review compliance agreements to ensure swift review and adjudication."

Measurement Canada will investigate the available options to ensure that the review of compliance agreements and appeals occurs in a timely manner.

Measurement Canada's processes for issuing a notice of violation will include checks and balances to ensure that the efforts of a regulated party to comply are taken into consideration.

5.2.6 AMPs timelines

To promote compliance, the process imposes timelines on the recipient of a notice of violation in which to exercise a variety of options. These include paying only 50% of the penalty, provided that it is done within 15 days of the date on the notice of violation. The process also allows for a maximum of 30 days in which to exercise the option of full payment, request for a review, or apply for a compliance agreement, if applicable.

Two industry associations provided feedback stating that the proposed payment time frames do not match their current financial practices.

A stakeholder stated that they: "…should be given 35 days to pay to capture the 50% savings. Large companies have strong governance policies in place to ensure fiscal responsibility; it is extremely difficult to pay within the suggested 15 day time frame."

Stakeholder feedback:

It was stated that the time frames should be adjusted to be more in line with some of the financial practices of industries.

Although the proposed payment timelines do not seem to align with the financial practices of certain industries, extending them may attenuate the original intent of AMPs, which is to promote compliance in a timely manner. Extending the timelines could mean that the resolution of instances of non-compliance would also be deferred. The proposed regulations and timelines are similar to regulations and timelines currently used by other government departments. As part of a graduated enforcement program, Measurement Canada would likely issue warnings prior to issuing a notice of violation. Furthermore, in instances where a notice of violation exceeds $1000, the non-complying party will have the option of entering into a compliance agreement to resolve the issue.

5.2.7 Penalty amounts

No feedback indicating opposition to the amount of the proposed penalties was received.

On the contrary, one stakeholder stated: "We are not in a proper position to comment on the fine amounts but an increase to already established fines would help better deter measurement inaccuracy."

5.2.8 Application of severity factors in the calculation and adjustments of penalties

Stakeholder feedback:

  1. One stakeholder stated that a consistent violation rating between disciplines is needed.

    Based on the feedback received, Measurement Canada will ensure that the rating methodology for all violations will be such that there is consistency between disciplines.

  2. The history severity factor should not penalize an owner of different establishments, due to the poor history in one of his/her establishments, while the other establishments have a good compliance history.

    Measurement Canada recognizes the concern expressed in this comment. This item will be considered during the implementation of the administrative processes.

6.0 Conclusion

The majority of the comments received were positive, and many of them were related to clarification and implementation issues. Some stakeholders provided Measurement Canada with ideas and suggestions on how to improve the implementation of the regulatory proposals.

Based on the received feedback, Measurement Canada will begin processing the proposed regulations as the next step in the implementation of the amendments made to the Electricity and Gas Inspection Act and the Weights and Measures Act