The Internal Trade Secretariat (ITS) was established in 1995 to provide administrative and operational support to the Ministerial Committee on Internal Trade (CIT). The CIT has responsibility to implement the Agreement on Internal Trade (AIT). In addition to providing support to the CIT, the ITS also serves the Internal Trade Representatives (ITRs) of the Parties to the Agreement, and the CIT negotiating committees and working groups implementing specific chapters of the Agreement.

The ITS is an independent, not-for-profit association¹ with its sole office located in Winnipeg. The affairs of the ITS are directed by a Management Board (MB) whose membership is comprised of representatives of Canada’s 10 provinces, two territories and the federal government. Currently, Nunavut has observer status on the CIT but is not represented on the MB.

The ITS has an Executive Director responsible for fulfilling the association’s mandate. The Executive Director has been supported by three policy advisors, a financial and MIS officer, and an administration/translation officer. Currently, there are two policy advisors.

Study Purpose

The purpose of this study was to prepare a formative evaluation of the ITS as required by Treasury Board. An evaluation framework² was prepared in advance and served as the basis for the work. The approach adopted for the study included all methodologies from the framework, including a document review, and interviews with ITRs and AIT Chapter Committee Chairs, among others. These were supplemented by a site visit to the Secretariat, two case studies of disputes that had been registered under the AIT, and the analysis of client survey data collected by the ITS.

Observations on the Future of the ITS

As a formative evaluation, the study was to explore management issues and whether adjustments are required to the services of the ITS. Fundamental changes were not to be considered and, as such, this study was based on a “business as usual” scenario for the ITS. However, over the course of the study, the review team became aware of several issues of controversy that could have an impact on the future role of the ITS. These included, but were not limited to, possibly significant cuts to the budget of the ITS, and accusations of bias on the part of ITS staff. While the vast majority of those consulted felt the ITS should continue its current functions, several ITRs are giving consideration to what might be considered a “leaner” ITS. In this instance, Parties are giving consideration to a reduction in staff of the ITS and the breadth of services provided.

Those consulted appear to be divided on the value of the ITS services, based on their vision of the AIT. Most see the AIT as an important tool for reducing trade barriers, while several feel the political will necessary to introduce change is lacking. Upcoming CIT meetings are expected to provide direction that may assist the implementation of the AIT and, therefore, have a direct bearing on the ITS and its budget.

A poignant comment made during the study was the following: “The key to the AIT moving forward is the momentum and direction of Ministers, and good chemistry among officials”. The review team felt that some of the controversy at this juncture for the ITS may stem from insufficient emphasis being placed by several Parties on the spirit and intent of the AIT. It was reported by the ITS that the AIT implementation process is not intended to be analogous to a traditional judicial process.³ It may be intended to be analogous to those of other trade organizations such as the World Trade Organization that have greater powers of enforcement. And it may be intended to be a cost-effective and expeditious process to reduce trade barriers to the extent possible and which, as one Party said, “when used appropriately, is a great mechanism for engaging inter-provincial dialogue”.

Evaluation Issues and Questions

In broad terms, the study team sought to explore the following issues and questions:

1) Efficiency of ITS Services

To what extent are services timely?

How could timeliness be improved, if at all?

Are services suitably accessible?

Are services impartial?

2) Effectiveness of ITS Services

Which services are considered essential? Which are non-essential?

To what extent are stakeholders satisfied with the overall quality of services?

What are possible additional services, if any?

If ITS services became unavailable, would these services be available elsewhere, and at what cost?

To explore these issues, the review team prepared a workflow analysis for each of the ITS service areas. This analysis provided a context to examine, through interviews and other avenues of enquiry, the performance indicators developed by management⁴ for these areas. The views of interviewees were held in confidence and were reported in aggregate to the Study Steering Committee on a basis that respects that confidentiality. The number of interviewees by stakeholder group is summarized in the Table below.

Table: Number of Interviews, by Stakeholder Group
Interview Groups	Number of Interviews
ITS Staff	5
ITRs	8
Chairs of Working Groups/Committees	8
Case Study Participants*	7
Industry Canada	2
Total	30

* Certain ITRs and ITS staff were interviewed a second time through the case studies.

Conclusions

Based on the evidence gathered over the course of the study, the following conclusions were reached regarding the efficiency and effectiveness of ITS services. Overall, the review team concluded that the ITS provides services at a high professional level and in an impartial, timely and accessible manner. This was echoed by 95% of respondents from the 2002 Client Survey. As reported by one interviewee, “they do a good job in a difficult situation.”

Efficiency of Services

Timeliness

ITS services were found to be timely, with few reported difficulties in this area. ITS met deadlines, notwithstanding time pressures, and not infrequent delays in receiving input from Parties. The ITS exhibited appropriate diligence in informing disputants regarding dispute process timelines. At times, the ability of the ITS to provide timely translation services is compromised due to delays in finalizing English versions. It appeared to the review team that staff remains flexible and adaptive to sometime significant swings in workloads.

Accessibility

ITS staff and resources were found to be readily accessible and responsive to requests from all stakeholders. It would be beneficial for Parties to have an improved understanding of the role of the ITS in the dispute resolution process, given the varying views on the extent the ITS should be accessible during this process.

Impartiality

This issue was the subject of considerable discussion over the course of the study. The review team concluded that the ITS services are impartial, and that services have not been provided in a manner that contravenes MB policy or sound management practice. ITS staff were found to go to great lengths to avoid putting themselves in a position of conflict of interest or bias generally, both in appearance and in fact, and in the dispute resolution process in particular.

Effectiveness of Services

Quality

The quality of ITS services was considered by the review team to be high. The technical and secretarial functions were reported by interviewees to have been provided in a professional and responsive manner. Protocols for sharing and distributing information were largely observed. Staff continue to seek ways to improve the quality of their services, through performance measurement initiatives, including a survey of clients.

Cost

Although a rigorous cost-effectiveness analysis was beyond the scope of this study, evidence gathered indicated that the collective costs of parties to receive ITS-type services would appear to be higher without the ITS. Legal fees, translation expenses, travel costs, among others, were reported to be lower through economies of scale. Through the case studies, it was reported, for example, that panel members are remunerated at significantly less than market rates. While there were certain exceptions, financial contributors to the ITS reported feeling they receive value for money for the services they receive. It was noted, however, that the number of meetings administered by the ITS appears to be in decline. For example, while the CIT is normally intended to meet annually, this has not been the case in recent years. Should this continue, a re-examination of the cost-effectiveness of operational support services at a later date may be warranted.

Appropriateness of Services

Discussions are ongoing regarding the ’04-’05 budget for the ITS. The review team solicited the views of those consulted on whether or not each of the ITS service areas is either essential, not essential or should be optional or provided through a user pay system.

The Table below tabulates the responses by service area. It is noted that for certain services it may not be appropriate to make them optional. For example, certain annual information services lose their value if not all Parties participate, although some parties have not been reporting certain information for a number of years. Although it was not the goal of this study to conduct a detailed assessment of the cost-effectiveness of the ITS or to propose changes to service offerings, the responses received are useful in identifying the level of importance attached to ITS services. Note that the responses had no bearing on whether or not the services should be offered; in fact, the majority reported that the current service offering should continue.

Table: Extent to Which ITS Services are Considered Essential
Extent Service Essential	Service Area (Number of Respondents)
Extent Service Essential	Operational Support	Advisory Services	Dispute Resolution	Information	Communications
Yes	9	2	8	4	1
No	0	2	1*	1	3
User pay/optional	0	5	0	4	4

*This respondent reported that a purely clerical role is all that would be required to support disputes. This type of service, therefore, is considered operational support.

Recommendations

A number of recommendations are made to further improve the efficiency and effectiveness of the Secretariat, as follows.

Operational Support Services

That the ITS staff identify clearly those performance targets that are new each year, modifications that are made to previously set targets, actual performance against each target, and explain why any targets were not met and how the situation could be addressed. The MB may wish to review the frequency with which it receives this report, currently annually.

That the ITS continue to provide simultaneous translation services for meetings unless all delegates for a given meeting explicitly indicate that these services are not required.

That the ITS propose a draft meeting schedule and meeting agendas as part of the annual planning process for the following year.

Administrative Advisory Services

That the ITS propose to the MB an administrative protocol for collecting and reporting on emerging issues, perhaps similar to that for disputes.

Dispute Resolution Services

That, once reviewed by the MB, the ITS consider a wider dissemination of the manual of procedures for processing disputes.

That the ITS prepare both Curriculum Vitae format and content guidelines for dispute panel nominees, and implement a process to collect this information.

That the MB consider what information is required on an invoice for dispute services and direct staff to revise the current format if required.

Communications and Outreach Services

That the ITS consider developing and proposing to the MB a brief communications plan for Chapter Committee Chairs and/or members. This plan would include the intended objective of improving communications with committees, a simple communications tool that would meet that need, and additional funds, if any, required for implementing the plan.

Although the affairs of the ITS are carried out as if it were a company, the Parties chose not to incorporate it.

Evaluation Framework for the Internal Trade Secretariat, Sypher:Mueller International Inc., March, 2001

Excerpt from canada.justice.gc.ca: “Rules, in the broadest sense, guide behaviour by telling people how things are to be done. However, there are many different types of rules. For example, they differ in terms of how they influence behaviour:
- Acts, regulations or directives tend to apply to groups of people and have legal force in that they can be enforced by the courts;
- contracts or agreements also have legal force, but they generally apply only to those who are parties to them;
- guidelines, voluntary codes or standards and self-imposed rules usually apply to groups of people, but they do not have legal force, relying instead on their persuasive or moral value.”
As identified in the Secretariat’s business plan.

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