Treasury Board President Announces Revised External Charging Policy

[ Backgrounder ]

September 3, 2003

Ottawa - The Honourable Lucienne Robillard, President of the Treasury Board and Member of Parliament for Westmount - Ville-Marie, announced today a revised policy on external charging, which requires greater accountability, transparency and stakeholder consultation in the development and management of user charges. "Today, I am delivering on a promise made in the last budget to improve the management of user charging. This revised policy is a significant step forward as it will enhance transparency and accountability," Minister Robillard said.

User charges are one way to fund government services and to promote the efficient allocation of government resources on behalf of Canadians. Charges can be based either on the cost of the services and products used, or on the value of benefits received by users who enjoy the right, privilege or access to government-owned or controlled resources.

The External Charging Policy is the product of consultations by the Treasury Board Secretariat with external stakeholders, departments and agencies, and Members of Parliament.

The policy, which replaces the 1997 Cost Recovery and Charging Policy, retains and enhances the fundamental principles of equity, accountability and communication. Underscoring the importance of parliamentary oversight and ministerial accountability, it also increases emphasis on open, transparent and on-going stakeholder consultation, comprehensive monitoring and reporting.

"The federal government has engaged in external charging since Confederation and today, similar to other jurisdictions, applies fees to a diverse range of activities. By implementing improved management practices, including a greater awareness of the full costs of products and services and the value of public assets, the revised policy will help to ensure more effective and responsive service delivery and the sound stewardship of public resources," added Minister Robillard.

The new policy compares favourably with other provincial and national jurisdictions in terms of the information provided on user charges and the requirements that must be met when instituting charging. These changes, which take into account many of the suggestions we heard in our consultations, will make the policy even better.

The revised policy outlines the conditions under which external charging is appropriate as well as the requirements for establishing, amending and managing external charges. It applies immediately to departments and agencies introducing new fees or amending existing ones.

The improved provisions maintain the balance between enhanced accountability and practical application. They set out more clearly the expectations of the Treasury Board with respect to the way departments and agencies implement, monitor and report on external charges.

The policy aims to ensure that external charging is managed in a fair and equitable manner, based on an appropriate and balanced understanding of stakeholders' interests.

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For more information, contact:
Russell Milon
Office of the President of the Treasury Board of Canada
(613) 957-2666

Shawn Dearn
Media Relations
Treasury Board of Canada Secretariat
(613) 941-9443

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Backgrounder

User charges have existed in one form or another since Confederation. Parks Canada, for example, has been charging for services since the 1880s. Today, the Government of Canada, like most other governments, charges for a diverse range of products, services, and regulatory activities, as well as for access to or use of government-owned or controlled resources. There are currently 400 external charging programs in 47 departments and agencies resulting in thousands of different fees.

The revised External Charging Policy (renamed from Cost Recovery and Charging Policy, 1997) was developed based on the findings from the review of the 1997 policy. The focus throughout the review and development of the policy was on strengthening accountability and improving transparency. This has been achieved by emphasizing open and transparent communication with stakeholders on all aspects of fee setting, monitoring by departments and the Treasury Board Secretariat (TBS), and more substantive reporting to Parliament and the public.

From the beginning of the policy review process, consultation has been a top priority. It is also viewed as the "backbone" to the policy.

Three advisory groups were established to assist in the review: an Assistant Deputy Minister Advisory Committee to provide strategic advice and facilitate the review; a supporting Departmental Sub-committee/Working Group; and, an Expert Advisory Panel with business representatives, academics and public policy experts to provide an external perspective.

Interviews and focus group sessions were conducted with about 80 federal corporate and program managers and 59 external organizations (firms, industry associations and interest groups) focusing on their experiences with the policy and its implementation.

Input into the review also came from parliamentarians (most notably the Standing Committee on Finance) and industry representatives.

TBS also undertook a benchmarking study of the external charging policies and practices of 11 jurisdictions (provincial and international). This study revealed that, overall, Canada's 1997 policy compared favourably with the other jurisdictions and that Canada's decentralized approach (i.e. departmental responsibility for charging) is typical but that no other policy is comparably specific and detailed. This includes such key elements as stakeholder consultation practices, the need for appropriate analysis and the setting of clear and agreed-to performance measures.

There is a consensus among all stakeholders that the principles of external charging are sound. However, the Standing Committee on Finance, the Auditor General and industry associations have been critical of the implementation of the policy by some departments and agencies. The Standing Committee has also expressed concern with the level of accountability. The need for greater accountability was also raised in Budget 2003 with the specific commitment to set out the principles and enhanced implementation requirements for improved management of user charging and cost recovery.

The revised policy addresses the concerns of implementation and accountability. It provides more explicit guidance to departments on important implementation elements while providing flexibility to tailor implementation to specific departmental external charging activities. It also recognizes that both departments and stakeholders play an important role in the successful implementation of some of the requirements. The policy's principles-based approach supports the concept of Ministerial responsibility, wherein each department is responsible for managing its external charges. Individual ministers and departments are responsible and accountable for establishing external charges pursuant to various authorities granted to them by Parliament.

The Treasury Board Secretariat is responsible for guiding and monitoring government-wide implementation of the policy.

The following table summarizes the key modifications to the External Charging Policy.