Government Claims that the CSA is Part of Government

March 26th, 2014

In 1919, the entire budget of the Canadian Standards Association (“CSA”) was $20k.  Corrected for inflation, that figure today is $264k.  Why such a modest sum?  Well, the CSA wasn’t created for commercial operations, it was given a modest mandate as a public regulator.  In 1919, Alexander MacLean noted of CSA staff that “they are not paid anything themselves, the work being purely voluntary.”  And MacLean ought to know, he was a Minister in the Government of Robert Borden.

Today however, the annual budget for the CSA is more than a quarter of a billion dollars.  And their staff aren’t “purely voluntary,” their management is paid awfully well and they now have more than 1,600 employees.

Back in 1919, fully 50% of the CSA’s annual budget was paid directly by the Federal Government.  That’s the important part.

You see, if one were to ask the current Minister of Industry whether the CSA is a government regulator, the answer would be “no.”  But if you asked an agency within Industry Canada, as we once did, the answer would be “yes.”  If you were to ask the CSA if they were part of government they would say “no.”  Unless you asked one of their foreign offices, in which case the answer would change to “yes.”  If Industry Canada asked the CSA the answer would be “no.”  If The Competition Bureau asked them, and they did, then the answer changes to “yes.”

See the problem?

In this smog of ambiguity, the current Minister of Industry, James Moore, has cheerfully advised us that “the CSA is not government-mandated” and is “not a regulatory body,” that it “has no regulatory role in Canada,” and that the CSA “does not report to the Minister of Industry either directly or indirectly” and “does not report to the Standards Council of Canada (“SCC”).  Rubbish.  This has been a chronic problem with the CSA for many years.  “Our letters to the Minister of Trade and Commerce and to the Department of National Revenue all result in having them remind us that they cannot do anything because it is not their responsibility.”  This was from Bulletin #68 issued years ago by the Canadian Lamp and Fixture Manufacturer’s Association.  The Bulletin was entitled: “Buck-Passing Deluxe.”

We’ve refuted some of Minister Moore’s claims already, the SCC reporting for instance, but it might help clarify matters to briefly review the relationship between the CSA and the Federal Government. 

Originally, the CSA was created when Canada was a Dominion of the British Empire and the ties between the two Governments were more pronounced.  The CSA was founded in 1903 as a branch of the British Engineering Standards Committee (“BESC”), itself closely tied to the British Board of Trade.  The Board of Trade of course, is a committee of the Privy Council of the British Government.  The CSA then, was founded by the Government of the United Kingdom as a branch of the civil service.

Canada’s Federal Government granted the CSA a Federal Charter sixteen years later in 1919, and this later date is what CSA falsely claims as their founding.  Why claim a false date?  Well, it muddies things nicely.  If the CSA is a branch of government, it can hardly be a private, not-for-profit, right?  Clarity is a problem for the CSA, they prefer ambiguity.

So, the CSA was a branch of BESC, and BESC also has a Charter.  Having a Federal Charter affords the holder certain of the rights of government and it furnishes government with certain control over the Charter holder.  Specifically, a Royal Charter holder like the BESC “surrenders significant aspects of the control of its internal affairs to the Privy Council” of the Government.  Further, “amendments to Charters can be made only with the agreement of The Queen in Council […].  This effectively means a significant degree of Government regulation of the affairs of the body, and the Privy Council will therefore wish to be satisfied that such regulation accords with public policy.” 

That doesn’t sound much like a private company, does it?

James McGrath served for twenty-four years in as an M.P. in Canada’s Parliament, and he didn’t think the CSA was a private company either.  And he was blunt: “[the CSA] enjoys the privileges of a federal charter.”  What privileges?  “For purposes of our dealings with the Common Market or other countries in the world,” the CSA is the same “as a government body because, as I said, up to this date the Government of Canada has participated fully in this organization.”

Actually, the Federal Government has always heavily funded the CSA.  Remember the CSA’s $20k budget in 1919?  The Federal Government contributed $10k of that figure, fully 50% of CSA’s annual budget.  And they were pleased to do it.  “The [funding] was deemed a very good expenditure on the part of the Government.”  And it was justified by the treatment of CSA’s sponsor in the United Kingdom, as “the British Government renders the same assistance in Great Britain,” this assistance going to the BESC.  So, once again the Federally Chartered CSA is considered by Canada’s Government as directly comparable to a government department in Britain.

As for Minister Moore’s claim that the CSA “does not report to the Department,” when Mr. Pierre Casgrain, M.P. asked if the CSA made reports to Parliament, Sir George Foster replied “yes, and we have on record the results of their work.”  And Sir George was the Minister of Industry.  That’s awkward.

By the time of the 17th Parliament (1930-35), the CSA had been made “an associate member of” what is now called the National Research Council (“NRC”), a body responsible to the Minister of Industry.  The CSA had by then been receiving sizeable “subsidies” from the NRC as approved by the Minister of Industry on “the same basis” as other bodies of government. 

This CSA’s status as a government agency was confirmed during the 19th Parliament (1940-45) by the Hon. James MacKinnon.  He was Minister of Industry at the time.

Former Prime Minister Arthur Meighen also weighed in, noting the 1922 Federal budget split as between funding two Federal agencies, the NRC and the CSA.

The old warhorse Herbert Herridge, M.P. for Kootenay West, was once feting a former director of the CSA in a Parliamentary speech.  “The time comes,” he said, “when we should recognize what has been done by senior civil servants.”  Indeed we should.

Parliamentary quotations are usually pretty dull, and these are no exception.  We think these quotes are awfully interesting but we’re more closely involved than most people, so we’ll skip the rest of them.  The bottom line is that there’s no shortage of confirmations by Government Ministers and officials that the CSA is indeed a government regulator.

While the record of the CSA’s status is clear, that clarity restricts things for the CSA.  So much better, from their perspective, to try to muddy things, to make their status more malleable to profitable interests.

Once, in the House, an M.P. expressed frustration at the CSA’s creeping ambiguity.  “I believe I asked the logical questions.  What is this Association?  What are its functions?  Are its activities under the direct supervision of a government department?”  This member received some Metcalfe-like answers, and he pushed harder in response.  The Minister “says the work [of import inspection] is entrusted to what he calls a private firm.  I expect that is not a good definition of the Canadian Standards Association.  This organization may be private but I believe it receives from the Dominion Government a grant of some $20,000 a year.  The Minister would know and can correct me.”

No less a Minister than C.D. Howe rose to respond.  He said that the Canadian Government “received a request to establish a branch of the [CSA] on the continent.  As my Hon. friend says, a branch was established in Holland at Arnheim.  […] the [CSA] stands between the Canadian people and the quality of the goods sold to them…”  Right, in so many ways.

Notice that it was the Government that received the request and it was the Government acted upon it and it was the Minister of Industry who said so.

Nearly all Parliamentary debates regarding CSA activity were handled for the Government by Canada’s Ministers of Industry.  One such Minister of Industry, Jean-Luc Pepin, repeatedly referred to the CSA as a government entity, once going so far as to call the Standards Council of Canada a kind of Parliament within which the CSA did the work of government. 

Still, some M.P.s, like John Hamilton (York-West) were angered by the CSA’s muddying efforts.  “It is difficult to find out just exactly what the situation is in connection with the association, or to ascertain its official status.”  We think so too.  He continues; “I notice that in their general information they indicate that the [CSA] is a non-profit, non-government standards development organization. […]  The average person would assume that it had no connection whatsoever with any branch of government.  Yet if one will look at page 35 of the Ottawa telephone directory he will find the [CSA] listed under the telephone number 2-8211 of the Government of Canada.  And if he goes by the official telephone directory issued by the Government he finds the [CSA] listed at page 8.”

You caught that?  The Federal Government, and indeed the telephone utilities, were listing the CSA as a government agency.

Hamilton’s conclusion?  “I assume we must give this association some kind of semi-official status, and we must ask that some recognition of that fact be given by the various government departments.”  […] I do not think one can say to the businessman ‘this association is entirely outside the government’ even though we list it in the telephone directory and in our own government directory, it is outside’.  I do not think the government can say, ‘this association sets the standards from one end of this country to the other,” but it is somehow not the Government’s responsibility.

We concur completely.  Throughout Canadian history, the CSA has always reported to the Minister of Industry and to the Department.  Legally, the CSA has always enjoyed the status of a federal regulator by Federal Charter, first by decision of the British Government and subsequently by decision of the Canadian Government.  Ministerial precedents and Parliamentary statements, through a succession of Ministers of Industry spanning more than a century, consistently affirm the CSA as an agency of the Federal Government mandated with regulatory responsibility. 

Mister Moore needs to man-up.  He’d do well to put away his Metcalfe and return his renegade regulator to the rule of law.