External Charging
On March 31, 2004, the User Fees Act received Royal Assent from the Parliament of Canada, which established a protocol for fixing, increasing, expanding the application of or increasing the duration of a user fee. Health Canada has developed a Policy on External Charging and a number of Guidelines, which respect and clarify the User Fees Act and support departmental initiatives to introduce new fees or amend existing fees. The Policy and Guidelines apply to all external fees.
Introduction
The past decades have witnessed dramatic changes in public expectations about fiscal responsibility in government. The impact of the federal government's Program Reviews is well known: a fundamental rethinking about government's role in providing services has been required. Efforts to meet concerns about why some services are delivered and how performance can be measured and improved may be found in government initiatives introducing charges for services, rights and privileges.
Charging for regulatory services, rights and privileges, or, "external charging," has become an integral feature of many programs under the authority of the Minister of Health. Central to these initiatives is the rationale that charging fees fosters greater accountability for the use of scarce government resources.
By charging for services, rights and privileges, direct users have an opportunity to decide if they do value the services, rights and privileges they are getting. In the context of today's exponential growth in health-related knowledge, technology, techniques and therapies, these charges can act as a natural check against spiraling costs and demands on programs.
Implementing external charging is not without challenges. For instance, achieving the goal of greater accountability for scarce government resources is difficult in many situations. The extensive consultations undertaken to support Health Canada's external charging initiatives have served to support greater accountability and increase understanding between government, clients and stakeholders. Many who have participated in these consultations have seen them as a key benefit of charges being introduced.
Currently, there are external charging initiatives within the following areas:
A Departmental Centre for External Charging
The Revenue and Costing Section, Chief Financial Officer Branch, has been established as a Center of Expertise as part of Health Canada's efforts to provide quality, cost effective services to the Department's programs, specifically to provide corporate support to external charging initiatives within Health Canada.
Health Canada Policy and Guidelines
On March 2, 2007, the Sub-Committee on Finance, Evaluation and Accountability of the Departmental Executive Committee (DEC-FEA) approved the departmental Policy on External Charging. The highlights of the Policy are as follows:
- Fees must be considered as part of the overall funding strategy;
- All identifiable related costs must be recovered, unless there are justifiable reasons not to;
- Any net voted revenue shortfall that arises as a result of collecting less than total identifiable costs must be covered by the appropriation;
- Fee activities must be monitored;
- A timetable for periodic review must be established;
- Consideration must be given to establishing and including rules for adjustment, for example, inflation; and,
- Roles and responsibilities are identified.
Subsequent to the approval of the Policy, the Senior Fulltime Financial Officer approved the following supporting Guidelines. The highlights of the approved Guidelines are as follows:
This guideline reminds managers of the steps required in establishing/updating a fee and assists managers in documenting actions taken to determine the appropriateness and financial viability of fees for future reference.
This guideline outlines steps to follow in resolving complaints and managing disputes for proposed and existing fees.
This guideline identifies elements and processes in developing appropriate service standards for external fees, including performance measurement and reporting.
This guideline provides principles and steps and identifies the tools and resources to:
- Take place before a Department fixes, increases, expands the application of, or increases the duration of a fee; and,
- Involve all parties who are interested in or are affected by the outcome of the fee proposal.
This guideline provides guidance on the manner in which fees are organized.
This guideline establishes ground rules and protocols in providing further relief to specific groups or individual fee payers, in addition to the subsidies that may already be given to all fee payers of the relevant external charging service.
Policy and Guidelines Under Development
The following Policy and Guidelines are under development:
- Policy on Costing
- Relationship of Fees to Appropriations
Background Documents
 User Fees Act (March 2004)
Treasury Board Policy on Service Standards for External Fees (November 2004)
Departmental Performance Report
For further information, please contact the Revenue and Costing Section or 613-952-9936.
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