The seemingly unstoppable expansion of bureaucratic burdens
“Several individuals gave high praise … there was even a round of applause. Once I saw this positive reaction I informed them that it was I who conceived, planned, and implemented the whole thing.” This is from an internal Industry Canada email, it absolutely must be sarcasm. The email continued. “There was general recognition that this would not have happened without OCA’s [Industry Canada’s Office of Consumer Affairs] leverage and coordination.”
Their subject was the Canadian Standards Association’s (CSA’s) new home inspection standard. Industry Canada was heavily involved in developing this new standard. So heavily, in fact, that in researching hundreds of pages of internal documents acquired through Access to Information laws, it’s often hard to tell the difference between Industry Canada and CSA, as to who was driving whom in the process. This is the same tranche of documents that yielded CSA’s accidental admission to taking “$60-70MM” per year in influence payments. Anyway, the documents reveal how both CSA and Industry Canada use the powers of Government to expand their own authorities.
We’ve seen CSA do this before, and we’ve reported on it, and they’re already active in propane regulations. The next big bureaucratic wave could hit the propane business hard. What follows is a warning for propane, it’s the record of how CSA inserted itself as a new regulatory layer in Canadian real estate transactions.
Impose New Home Inspection Regulations
First, the target, in this case is home inspections. Typical real estate transactions include a home inspection. These are done to ensure the new home is safe and sound; it can also be a requirement for insurance coverage, mortgages, etc. It’s all straightforward. You contract a credible home inspector to explore the house and report its condition and defects. No problem.
It is a problem though, for CSA, because home inspections are taking place without anyone paying money to CSA Group. There have been decades of home inspections across Canada and all without CSA’s oversight, certification, invoicing (obviously), or legislated control. This isn’t healthy for bureaucracy; something must be done!
The CSA started with some enablers inside government. Civil servants are usually keen to expand their authority and were only too willing to help CSA build a new bureaucracy in which both parties could plod profitably onward. They worked to get government onto CSA’s committees, both for imprimatur of government among affected parties, for access to taxpayer’s dollars to pay for everything, so government could pass the resulting legislation, and federal influence with other governments, thus ensuring total subservience of the public.
From Industry Canada. “Mr. George Yates [Govt of Alberta] is leading the proposed [CSA] standards committee [to develop the home inspection standard] and Mr. Michael Barnes, senior consumer policy analyst, Office of Consumer Affairs [Industry Canada], will also participate on that committee.” See? It’s starting.
They crammed the committee with fellow travelers. By the time CSA’s committee stacking was through, the list was so worrying that even CSA’s management urged it be kept secret. In a CSA email to Barnes, “Here you go. Please ensure no distribution.”
Industry Canada saw the awful optics too. “Hello Jay,” said Barnes to Industry Canada’s Jay Jackson, senior policy officer at Industry Canada. “Here is the breakdown of the membership and affiliations for both the Technical Committee (TC) and Regulatory Affairs Committee (RAC). As you will see, [redacted] requests that the list is not distributed.” It was Jackson’s job to brief the deputy minister on why home inspection standards were needed, what Industry Canada planned to do with them, and why CSA should be the agency empowered to draft them. There was no doubt expressed in Jackson’s brief about the nature of the new standard, that it wasn’t going to be voluntary. Rather, this standard, like so many of CSA’s “voluntary” standards, was planned from the start to be transitioned into legislation.
On December 10th, Jackson informed the minister, “If passed, the text would likely be referred to the Standards Council of Canada to have it recognized as a National Standard of Canada.” Next, he said, the government could “facilitate coast-to-coast consumer awareness initiatives [and] ultimately, a national standard could serve as a vehicle to promote the development of a national curriculum to train home inspectors.” And that’s the next step for CSA too, mandating national training for inspectors, all run by CSA of course, and that quite profitably. The more they extend their mandate, the more money CSA makes.
In another document, Jackson also admitted to “some questions from [CSA] members as to how consumers can help encourage their provincial legislators to adopt this standard as quickly as possible into provincial building codes. A marketing plan is apparently being developed.”
In the minister’s brief, Jackson pointed out, “if the standard was adopted [as law] by Alberta, BC, and Ontario, this would result in 70 per cent of the Canadian population having regulatory protection with respect to this important service. This may prompt other jurisdictions to regulate as well.” Indeed. The whole affair, at least on the inside, was being treated like a market-share discussion. More regulations mean more regulators, and more money and more power for those already regulating.
The CSA was proposing an entirely new regulatory layer, with itself as the regulatory authority. It was clear about that in its internal presentations to Industry Canada, showing before and after slides of what the new home inspection standard would accomplish. Having got the government onto the committee, the CSA’s friends at Industry Canada next asked the deputy minister to authorize Industry Canada’s representatives on CSA’s committees to vote according to CSA’s direction.
As one briefing noted, “A positive vote by the official representing ISED [Innovation, Science and Economic Development Canada] on the committee will serve to demonstrate federal support for” CSA’s regulatory expansion. Remember the “imprimatur” comment above? Well, that’s part of why they’re there. And then, in response, the bombshell closer. “ISED’s representative will vote in favour of the standard. We will monitor the results of the vote and next steps as set out by CSA Group.”
Note who’s driving the process. It’s not the government of Canada; it’s CSA that sets out the steps that Industry Canada will take.
Alright, let’s pause for a moment. The home inspection standard development was really hitting up by the fall of 2015. Back then, the advocacy site www.RestoreCSA.com had already been reporting on CSA’s manipulation of legislative committees. In May, it ran an article on CSA’s use of committees to manipulate the market. Then, in June it published on the “manipulation of legislation for commercial interests.” Sounds topical, doesn’t it? By the fall of 2015, there appears to have been concern at Industry Canada that being so tightly in the service of CSA looked bad.
By December 2015, Industry Canada’s David Clarke wanted better cover. He urged a more compelling argument for his department’s support, saying, “More detail [is needed] on what it is; why ISED [Industry Canada] is involved. (CSA sought consumer perspective input, because…)” [typos in original] Specifically, Clarke had concerns which he outlined at length, and which were released as follows: “Considerations; […]” and the entire section that followed was redacted by Access to Information censors.
Optics Looked Terrible
In mid-December, there was concern and the deputy minister got cold feet. On December 14th, Clarke provided reassurance, “Since this is a voluntary standard, there is no obligation for Canadian home inspectors or governments to adopt the standard. Supporting the publication of the standard by providing a yes vote does not bind the voting party to undertake any specific action to implement or promote the standard.”
But remember the minister had already been briefed four days previously the home inspection standard was on a clear track to recognition as a “National Standard of Canada,” (i.e.: for legislation) and would be the basis for broad new bureaucratic powers in training and certification. Remember also that “a marketing plan” was being developed to “promote the standard.”
The office of the deputy minister had heard about CSA’s conduct, likely about www.RestoreCSA.com as well, and there were growing rumblings about how voluntary the home inspection standard would really be if CSA got its way. In a draft internal document, “Some home inspectors claim the new standard will substantially increase both the time to conduct and cost of home inspections.” The document quoted one inspector, “Our concern is that it’s going to drive up the cost because the time to do that is going to now be in the magnitude of three or four times what we’re doing now.” The next page is entirely redacted. On an advice to the director general document, some insider scribbled notes in the margin, “why are we involved” and “interventions from IC.” The “IC” is Industry Canada.
Inspectors Pushed Back Citing Time + Costs
Sensing pushback, the minions of Industry Canada dreamed up a means of reassuring everyone on the inside that everything was going swimmingly. What did they come up with? “It is recommended that the Office of Consumer Affairs enter a… contract [with] the Canadian Standards Association to report on the field testing of the draft CSA home inspection standard.”
That’s right, the CSA would be paid to review the CSA. The new contract was sent to Michael Barnes for approval. Barnes was Industry Canada’s representative on CSA’s committee, he was working for them. In other words, the approval to pay taxpayer money to CSA to review CSA was authorized by CSA.
Meanwhile, the marketing of CSA’s new home inspection standard fell to the Government of Canada. Letters were edited by Industry Canada to be sent to “several hundred or more inspectors and their associations” to introduce them to the coming new standard. Critically, it was Industry Canada that edited the letter directly, not its Agency CSA. “Here is the draft home inspection letter that will be sent to home inspectors” said Michael Barnes to Monica Gilbert [Industry Canada, Office of Consumer Affairs], “It would help to have someone review and amend it…. I am available to provide further insights and answer questions. I would like to send it back to CSA next week.”
With CSA busy reviewing it’s own standard, the government got worried that the people these regulators wanted to regulate might not want to be regulated. Naturally then, taxpayer funding was provided for Industry Canada officials to travel to CSA’s offices to work directly on CSA’s development of the standard, hoping to “help anticipate issues that may otherwise thwart successful development of the standard and its implementation.”
Later, there was concern over CSA’s translation of the standard into French. Specifically, “if the draft goes directly out with flaws it could attract a lot of unflattering attention which detracts from the attention to the standard.” Well, as David Dupuis wrote in response, “Michael [Barnes] will work with his various contacts to ensure the French is good quality.” Remember, Barnes works at both Industry Canada and CSA. But Barnes wasn’t working his CSA contacts, he was trying to use his federal contacts to obtain translation services, paid by the taxpayer, on behalf of CSA. If that didn’t work, wrote Barnes, “the second option for text to be reviewed by the translation services of the government of Ontario…. Perhaps if you approached one of the Ontario [govt] participants [to see if] they could see if [it] was possible.”
Throughout the email back and forth, the idea that CSA should pay for its own translation wasn’t even considered. Finally, in a summary report to the assistant deputy minister, it was admitted, “the department paid for the translation of the standard for public review.”
Next came the vote. Not in Parliament or a provincial legislature, mind you. No. Foisting of new regulatory burdens on the taxpayer would be decided by a closed committee whose members were hand-picked by CSA. Still, if the proposed policy is unnecessary and unpopular, and CSA’s home inspection standards would surely qualify, there’s always the danger committee members would vote according to their judgement rather than as they were told to. Both CSA and Industry Canada were worried.
From an internal email, “If there are any negative votes, the TC [Technical Committee] chair, acting on behalf of the committee, will take one or more of the following courses of action to disposition negative votes.” Note that the root of “disposition” is “dispose” it means “to dispose of” or to place “in a different position.” This doesn’t bode well. The email continued. If any negative votes, CSA can…
a) “Rule as non-germane if not accompanied by supporting reasons or the supporting reasons are not relevant to the items being balloted;
b) Attempt to resolve the negative with editorial changes
or explanation;
c) Rule as non-persuasive if the reasons for the vote have previously been considered and not accepted by the TC, [or;]”
d) Refer the negative vote back to committee for further review.
By November 2015, concern over negative votes had heightened. In an email string between Jackson and Barnes for instance, one asked what happens if people don’t vote the way they wanted them to. The answer; “The vote will then be dispositioned to deal with any objections.” There’s that word again. Votes are only counted if they’re the right votes.
Stacked or not, the committee would have to face a barrage of complaints made by actual home inspectors, the people whose whole careers would be placed in CSA’s hands by the new home inspection standard. Industry Canada fretted the committee members might water down the authority’s provisions when faced with a strong backlash. Specifically, they worried, “the coordinated preparation and presence by the home inspection industry members at forthcoming meeting [sic] is likely to favour the changes to the standard that they seek.”
In its advice to the assistant deputy minister, Industry Canada argued, “It is vital to protect the consumer interest against a strong and coordinated home industry presence which is likely to dilute those interests in the national standard.” Note how “consumer interest” is the term civil servants use to describe their own interests. Then, “The CSA […] has called on the federal government to be present at this pivotal meeting.”
The government of Canada is taking orders from one of its agencies? Isn’t that backwards? But the feds happily showed up for the meeting. Why wouldn’t they? After all, the expansion of regulatory authority is in the interest of every bureaucrat. In this cause, Industry Canada took its orders from CSA. Back in February 2015, they even sent one of their officials to CSA headquarters to “train” him in how CSA wanted the government to behave on committee, which way to vote, etc.
In November 2015, Industry Canada sent officials to Geneva for a “training session” in how to publicly sell people on voluntary standards, and then to privately transition the standards into legislation. The summary noted, “The training session concentrated almost exclusively on how to incorporate standards by reference in regulations.”
What amazes so many people is CSA/Industry Canada’s arrogance. Home inspectors weren’t demanding a new regulatory layer. Home purchasers weren’t clamoring for new regulations. The only people pushing for regulatory expansion were the regulators.
The result is a large, legislated increase in the cost of home ownership. The CSA now has the power to define home inspections, establish curriculum for home inspection courses, the mandate to make all inspectors pay CSA to take their courses, and they can eliminate uncooperative inspectors thereby denying them their vocation. All this must be paid for somehow, and that’s where you come in.
You’re the little guy facing the big bureaucracy. It’s your job to pay them to regulate you. There’s no shortage of regulatory opportunity. The Natural Gas and Propane Installation Code, for instance, or the Propane Storage and Handling Code, or the Dispensing Devices for Propane code, or Code for the Field Approval of Fuel-Related Components — one could go on at length.
Propane is in the crosshairs. The sector could live the home inspection experience of 2018. This is how CSA, and bureaucrats everywhere, expand their powers over the people they’re supposed to be serving.
Author: Dr. Gord Knight has 15 years consulting experience in communication strategy in corporate and political contexts. He has further served in the development of project viability assessments and asset acquisition research. As a senior strategist, he provides senior strategic counsel to companies across North America, playing a key role in the design and implementation of initiatives that have helped transform corporate cultures as well as companies’ reputations and relationships. He is currently chairman of IREL Group, the developer of the Dominion engineering project, and the CEO of P.S. Knight Co. Ltd., a Canadian publisher of technical manuals since 1967. www.restorecsa.ca
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