Vol. 148, No. 12 — June 4, 2014
SOR/2014-112 May 16, 2014
WEIGHTS AND MEASURES ACT
Regulations Amending the Weights and Measures Regulations (Administrative Monetary Penalties)
P.C. 2014-567 May 15, 2014
His Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to paragraph 10(1)(v) and section 22 (see footnote a) of the Weights and Measures Act (see footnote b), makes the annexed Regulations Amending the Weights and Measures Regulations (Administrative Monetary Penalties).
REGULATIONS AMENDING THE WEIGHTS AND MEASURES REGULATIONS (ADMINISTRATIVE MONETARY PENALTIES)
1. The Weights and Measures Regulations (see footnote 1) are amended by adding the following after section 345:
ADMINISTRATIVE MONETARY PENALTIES
346. The contravention of a provision of the Act or these Regulations set out in column 1 of Part 1 or 2, respectively, of Schedule VI may be proceeded with as a violation in accordance with sections 22.1 to 22.28 of the Act.
347. The violation of each provision set out in column 1 of Part 1 or 2 of Schedule VI is classified as a minor, serious or very serious violation in accordance with the classification set out in column 2.
348. (1) The amount of the penalty in respect of each violation is, subject to subsection (2),
- (a) $250, for a minor violation;
- (b) $500, for a serious violation; and
- (c) $1,000, for a very serious violation.
(2) The amount of the penalty is to be adjusted in accordance with the calculation set out in column 2 of Schedule VII that corresponds to the history set out in column 1 of the person who has committed the violation.
(3) For the purposes of determining a person’s history, the points set out in column 3 of Part 1 or 2 of Schedule VI are assigned for each violation of a provision set out in column 1.
349. The notice of violation is to set out that an amount equal to 50% of the penalty may be paid as complete satisfaction of the penalty if it is paid within the period referred to in subsection 351(1) and in the manner set out in the notice of violation in accordance with subsection 351(6).
350. If the Minister enters into a compliance agreement under subsection 22.13(1) of the Act, the conditions of which include the making of expenditures by a person, the amount of the penalty set out in the notice of violation is to be reduced by an amount equal to one half of the expenditures made in fulfilment of the agreement, with a maximum reduction to nil.
351. (1) For the purposes of paragraph 22.11(2)(e) of the Act, payment is to be made within 15 days after the day on which the person is provided with the notice of violation.
(2) For the purposes of subsection 22.12(1) of the Act, payment of the penalty set out in the notice of violation is to be made within 30 days after the day on which the person is provided with the notice.
(3) For the purposes of paragraph 22.13(4)(a) of the Act, payment is to be made within 15 days after the day on which the person is provided with the notice of default.
(4) For the purposes of subsection 22.14(1) of the Act, payment is to be made within 15 days after the day on which the person is provided with the Minister’s notice.
(5) For the purposes of subsection 22.15(3) of the Act, payment is to be made within 15 days after the day on which the person is provided with notice of the Minister’s decision under subsection 22.15(1) or (2) of the Act.
(6) A payment referred to in any of subsections (1) to (5) is to be made in one of the following manners, as set out in the applicable notice:
- (a) by means of a certified cheque or money order made payable to the Receiver General for Canada and submitted to a Measurement Canada office
- (i) by regular mail,
- (ii) by registered mail, or
- (iii) by courier; or
- (b) by electronic means.
REQUESTS UNDER SUBSECTION 22.12(2) OF THE ACT
352. (1) A request under paragraph 22.12(2)(a) or (b) of the Act shall, within 30 days after the day on which the person is provided with the notice of violation, be submitted in writing to a Measurement Canada office in one of the following manners, as set out in the notice:
- (a) in person;
- (b) by registered mail or courier; or
- (c) by electronic means.
(2) The request shall set out
- (a) the notice of violation number;
- (b) the person’s name, mailing address, email address, telephone number, facsimile number and contact person, if any;
- (c) an indication of whether the person prefers to communicate in English or French;
- (d) in the case of a request made under paragraph 22.12(2)(a) of the Act, a proposal detailing the corrective action that will be taken to ensure the person’s compliance with the provision to which the violation relates; and
- (e) in the case of a request made under paragraph 22.12(2)(b) of the Act, the person’s reasons for requesting the review.
(3) The date of the request is
- (a) the day on which it is submitted, if it is submitted in person; or
- (b) the day on which it is sent, if it is sent by registered mail, courier or electronic means.
2. The Regulations are amended by adding, after Schedule V, the Schedules VI and VII set out in the schedule to these Regulations.
COMING INTO FORCE
3. These Regulations come into force on the day on which section 19 of the Fairness at the Pumps Act, chapter 3 of the Statutes of Canada, 2011, comes into force, but if they are registered after that day, they come into force on the day on which they are registered.
(Sections 346 and 347 and subsection 348(3))
WEIGHTS AND MEASURES ACT
Provision of the Weights and Measures Act
WEIGHTS AND MEASURES REGULATIONS
Provision of the Weights and Measures Regulations
|1.||No violations committed under the Act or these Regulations in the five-year period immediately before the day on which the current violation was committed.||Reduce penalty by 50%|
|2.||Sum of the points assigned for all violations committed under the Act or these Regulations in the five-year period immediately before the day on which the current violation was committed is either one or two.||Reduce penalty by 25%|
|3.||Sum of the points assigned for all violations committed under the Act or these Regulations in the five-year period immediately before the day on which the current violation was committed is not less than three and not more than five.||No penalty adjustment|
|4.||Sum of the points assigned for all violations committed under the Act or these Regulations in the five-year period immediately before the day on which the current violation was committed is not less than six and not more than eight.||Increase penalty by 25%|
|5.||Sum of the points assigned for all violations committed under the Act or these Regulations in the five-year period immediately before the day on which the current violation was committed is more than eight.||Increase penalty by 50%|
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Traditional enforcement tools such as trader education, warning letters, notices of non-compliance, seizure of devices and prosecution are not always the most effective or cost-efficient means of assuring compliance with the requirements of the Weights and Measures Act (WMA) and the Weights and Measures Regulations (WMR). For example, judicial proceedings (prosecution), while an effective option, often result in considerable costs to the federal government and to the individual or corporation involved.
The Fairness at the Pumps Act provided the legislative framework for an Administrative Monetary Penalty (AMP) system; however, it indicated that many details were to be prescribed by regulation.
The Fairness at the Pumps Act (An Act to amend the Electricity and Gas Inspection Act and the Weights and Measures Act) was introduced by the Government of Canada in the House of Commons in April 2010, and received Royal Assent on March 23, 2011. The new legislation marked a fundamental step in a longer term process of evolution and innovation in assuring measurement accuracy for Canadians.
The Regulations will promote fair measurement practices in trade and improve confidence in the accuracy of measurements used in commercial transactions by giving Measurement Canada (MC) an additional tool that will be less severe than prosecution and will not pursue a punitive purpose, but will nonetheless be effective in promoting compliance with the Act and the Regulations.
To fully implement the AMP system, MC has developed regulations that set out the provisions of the WMA and its Regulations, whose contravention may be proceeded with as a violation for which a penalty can be imposed, and that specify the method and criteria for determining penalty amounts, as well as details of when and how notices of violation are to be issued and when and how to make payments and requests to enter into a compliance agreement or for a review.
Designation of provisions subject to administrative monetary penalties
The Regulations add a schedule (Schedule VI) to the WMR that sets out each of the provisions of the WMA and of the WMR, whose contravention may be proceeded with as a violation for the purposes of the AMP system, and that indicates whether the violation is classified as minor, serious or very serious.
Determination of the penalty amount
The WMA prescribes that the maximum penalty for a violation is $2,000, subject to specific exceptions identified in the WMA.
The Regulations establish a different baseline penalty for each of the three violation categories. The purpose of the categories is to associate the baseline penalty value of a violation with its level of regulatory significance.
- (a) $250, for a minor violation;
- (b) $500, for a serious violation; and
- (c) $1,000, for a very serious violation.
Process for establishing penalties
For each case, determining the penalty amount begins with identifying the violation and its associated category. The penalty amount may then be adjusted by a percentage as set out in Schedule VII, which has been added to the WMR to reflect the violator’s history of committing violations in the five-year period immediately before the day on which the current violation was committed. Both the number and seriousness of past violations are taken into account in determining the violator’s history.
Payment of the penalty
The Regulations provide details on when and how to make payments. They specify that if the penalty is paid within 15 days, the penalty is reduced by half. Otherwise, the full amount of the penalty must be paid within 30 days unless a request either to enter into a compliance agreement or for a review has been made.
In instances where the penalty is $1,000 or more, the WMA permits the person named in the notice of violation to request to enter into a compliance agreement with the Minister of Industry (the Minister) to ensure compliance with the provision to which the violation relates. The Regulations set out the manner of making such a request, as well as the effect of the compliance agreement on the amount of the penalty.
Review by the Minister
The WMA also allows the person named in the notice of violation to request that the Minister review the AMP (either the existence of the alleged violation or the amount of the penalty). The Regulations specify how the request for review may be made.
The “One-for-One” Rule does not apply to these Regulations, as there is no change in the administrative burden imposed on businesses.
Small business lens
The small business lens does not apply to these Regulations, as there are no incremental costs imposed on small businesses.
Consultation on an appropriate level of intervention in the marketplace has been ongoing through a trade sector review process. These consultations brought together industry representatives and associations, consumer associations, service providers as well as individual regulated parties and other government departments (both federal and provincial). MC estimates that over 3 000 stakeholders were consulted during these sector reviews. The use of an AMP system was recommended by consensus in the majority of these sector reviews.
The results of trade sector reviews are available online at www.ic.gc.ca/eic/site/mc-mc.nsf/eng/h_lm00215.html.
Measurement Canada consulted on its regulatory proposal for the introduction of AMPs under the Fairness at the Pumps Act, from June 20, 2011, to September 9, 2011. Approximately 1 700 stakeholders were contacted by email or phone during this consultation.
The results of this consultation are available online at www.ic.gc.ca/eic/site/mc-mc.nsf/eng/lm04524.html.
The majority of the comments received during this consultation were positive, and in many cases, stakeholders were seeking clarification on issues related to the proposed changes and their implementation. Some stakeholders provided MC with suggestions on how to improve the implementation of the regulatory proposals.
The regulatory amendments were published in Part I of the Canada Gazette on December 14, 2013, and the consultation period lasted 45 days. Only one response was received from a stakeholder representing the retail petroleum industry. The response was generally supportive, but some concerns were raised about the application of AMPs.
The stakeholder expressed concern about the potential for unfair penalties, and the reputational damage that could occur as a result of the publication of these penalties. MC’s response was that a graduated enforcement approach that includes trader education, information letters and warning letters will continue to be used to promote compliance. AMPs will be an additional tool which could be used in response to cases of non-compliance where the trader or device owner did not exercise due diligence to prevent the non-compliance. In addition, MC explained that training, monitoring and management oversight will be used to ensure fair and consistent application of AMPs.
The stakeholder also recommended that the graduated enforcement approach be outlined in the Regulations. In its response, MC explained that the inclusion of the graduated enforcement approach in the Regulations would not provide it with the flexibility to select the most appropriate enforcement measures.
The stakeholder also cautioned MC to ensure that the due diligence defence is considered before issuing a notice of violation. MC’s response was that due diligence is allowed as a defence in the amendments to the Electricity and Gas Inspection Act and the WMA and it is a standard defence to the contravention of a regulatory obligation. It will be up to the person receiving a notice of violation to establish whether due diligence was exercised. This may be taken into consideration by MC prior to issuing a notice of violation.
There were no changes to the proposed regulations as a result of the 45-day publication in Part I of the Canada Gazette.
The Regulations will indirectly benefit the Canadian public by improving measurement accuracy as a result of the expected improvement in compliance with the WMA and the WMR.
The AMPs will provide a cost-effective tool to promote and maintain compliance with the WMA and the WMR. The AMPs regulations offer the advantage of an enforcement response which does not pursue a punitive purpose, is less severe and quicker than prosecution and, as is the case with other “ticketing systems” (e.g. traffic violations), acts as a deterrent.
There are no foreseen impacts on traders or businesses that use measuring devices which comply with the WMA and its Regulations.
It should be noted that although the contravention of any designated provision is subject to an AMP, other tools such as trader education and warning letters may be used as an alternative for ensuring compliance, and prosecution, where applicable and appropriate.
Implementation, enforcement and service standards
The Regulations do not add any new requirements; they simply create an additional system for promoting compliance with the WMA and the WMR. Therefore, the AMP system will be integrated into MC’s existing graduated enforcement policy.
While MC may use an AMP system to deal with violations of the WMA and the WMR, an AMP system is just one of the tools available to promote compliance. Other tools include trader education, warning letters, device seizures and prosecution. The tool used in any instance will depend on the recommendations of the inspector and the decisions of a designated manager, in accordance with MC’s graduated enforcement policy.
In all cases of non-compliance, the response by MC will be tailored to achieve both compliance and deterrence. AMPs will generally only be imposed in instances where other tools cannot achieve that objective.
The use of AMPs will be phased in, so as to allow MC to build increased awareness amongst traders about the program. The phased-in approach will also allow time to train MC inspectors and management and to communicate the relevant policies and procedures for implementing and using AMPs.