Vol. 132, No. 27 — July 4, 1998

Regulations Amending the National Parks Garbage Regulations

Statutory Authority

National Parks Act

Sponsoring Department

Department of Canadian Heritage

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

Under authority of the National Parks Act, Parks Canada provides garbage collection and disposal services to residents and business operators in communities in the national parks. Through the National Parks Garbage Regulations made under the Act, Parks Canada charges fees for this service.

These Regulations were amended in 1996 to ensure that the rates being charged in all national park communities were sufficient to recover a fair share of operating and capital costs from residents and businesses which receive garbage collection and disposal services in those communities.

Recently, it has been recognized by the Waskesiu Community Council in Prince Albert National Park and the administration of the Park that the special provision included under subsection 13(5) of the National Parks Garbage Regulations do not provide for the application of the most appropriate fee structure in the community of Waskesiu. Therefore, this provision will be removed from the Regulations.

In addition, for the community of Wasagaming in Riding Mountain National Park, the garbage fee schedule will be replaced with a new one which will more equitably distribute the costs for this service among all users.

Alternatives

Two options were considered: (1) the status quo; and (2) the above-mentioned amendments.

(1) The status quo was considered unacceptable given Treasury Board's user-fee and cost-recovery policies that the taxpayers of Canada should not subsidize, through appropriations, the provision of services that do not benefit all citizens of Canada. All those who benefit directly from such services should pay the costs incurred for the provision of those services. By this means, a certain level of tax burden is lifted from the majority of Canadians.

(2) Based on the foregoing, it is considered that the best interim solution to the immediate cost-recovery situation is, for Waskesiu, deleting subsection 13(5) of the National Parks Garbage Regulations and, for Wasagaming, replacing the garbage fee schedule. This will ensure that the cost-recovery programs for these two communities remain on track. A more complex fee-structure amendment will be introduced in the near future which will allow decisions to be made at the local level and will obviate future fee amendments.

Benefits and Costs

Waskesiu

Subsection 13(5) of the National Parks Garbage Regulations states that the cost-recovery fees charged for this service should be either the amount calculated by means of the calculation formula or the amount that would have been charged under the 1995 fee schedule, whichever is the greater amount. This provision was included to ensure relative stability in rates.

However, at that time, the community council was under the understanding that the Regulations would refer to the previous billing period rather than a specific year's fee schedule. With the Regulations worded as is, the Park can levy charges for this year based on a rate schedule that is three years old.

Repealing this subsection will allow for cost recovery to occur based solely on the formula introduced in 1996 for Prince Albert National Park and will allow for the application of the most appropriate fee structure in the community of Waskesiu.

The Waskesiu Interim Community Council has endorsed these proposed changes.

Wasagaming

When garbage fees were increased in 1996 to achieve full cost recovery, the Wasagaming Community Council chose a percentage increase to the then existing fees. This method was deemed to be the most even-handed at the time, while recognizing that there may have been some inequities in the fee schedule. Since then, the fees have been reviewed further and the schedule is being replaced to provide for more evenly distributed fees. The revised fee schedule will not generate new revenues. Gross garbage collection revenues will remain unchanged from 1996.

All of the above-mentioned changes are in keeping with Treasury Board policies on user fees and cost recovery.

Consultation

The removal of the above-mentioned provision concerning Waskesiu has been discussed repeatedly and at length with the Waskesiu Interim Community Council which represents residents and business operators of the community. The Council concurs with the actions being taken.

The further review of the Riding Mountain National Park garbage fee schedule was initially undertaken at the request of the Wasagaming Community Council and the main stakeholder groups in the community have been consulted on the new rates. However, since early in the fee review, meetings of the Community Council have been suspended while community stakeholder groups re-evaluate their participation on that council. Nonetheless, Treasury Board user-fee and cost-recovery policies dictate that Parks Canada must proceed. The community groups have been advised that the move to more equitably distribute the recovery of costs will proceed despite the absence of the community council. Non-participation cannot be allowed to stop the process.

The community council of Wasagaming has, in the past, been involved in discussions of the need to revise the garbage fee schedule for that community. To ensure that standard municipal practices were used in setting the new fees, a private sector consultant with expertise in these fields was retained to develop the schedules.

Compliance and Enforcement

Upon receipt of their garbage service bills, national park residents and business operators are given 30 days to pay the fees charged for the collection and disposal of garbage. Where payment becomes overdue, a number of collection mechanisms are used such as written reminders and/or telephone contact. All efforts are made by Parks Canada to settle accounts amicably. Only in rare cases is it necessary to revert to court action or to the laying of charges under the National Parks Act for non-payment of outstanding accounts. The maximum fine under the National Parks Act for non-payment of fees is $2 000.

Contact

Sharon Budd, Project Manager, Regulatory Development, National Parks, Department of Canadian Heritage, 25 Eddy Street, 4th Floor, Hull, Quebec K1A 0M5, (819) 994-2698 (Telephone), (819) 994-5140 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council proposes, pursuant to subsection 7(1) (see footnote a) of the National Parks Act, to make the annexed Regulations Amending the National Parks Garbage Regulations.

Any interested person may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must be addressed to Sharon Budd, Project Manager, Regulatory Development, National Parks, Department of Canadian Heritage, Ottawa, Ontario K1A 0M5, (819) 994-5140 (Facsimile), and must cite the Canada Gazette, Part I, and the date of publication of this notice.

June 19, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE NATIONAL PARKS GARBAGE REGULATIONS

AMENDMENTS

1. Subsection 13(5) (see footnote 1) of the National Parks Garbage Regulations (see footnote 2) is repealed.

2. Table I (see footnote 3) of Schedule III to the Regulations is replaced by the following:

SCHEDULE III
(Section 11)

TABLE I

CHARGES FOR GARBAGE COLLECTION AND DISPOSAL SERVICES IN RIDING MOUNTAIN NATIONAL PARK

Item	Column I Class of Establishment	Column II Annual charge where garbage is collected or disposed of throughout the year ($)	Column III Annual charge where garbage is collected or disposed of seasonally ($)
1.	Residential dwelling unit	95.00	55.00
2.	Hotel or motel, per room	31.50	18.50
3.	Retail establishment	190.00	110.00
4.	Restaurant or bar, per seat	4.75	2.75
5.	Business office	190.00	110.00
6.	Dance hall, movie theatre or other entertainment or recreational facility	95.00	55.00
7.	Ancillary food or beverage facility	190.00	110.00
8.	Service station or garage	190.00	110.00
9.	Church, school or community hall	190.00	110.00
10.	Cabin lot	47.50	27.50
11.	Any establishment not listed in items 1 to 10	190.00	110.00

COMING INTO FORCE

3. These Regulations come into force on the date on which they are registered.

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Regulations Defining "Advertising Revenues"

Statutory Authority

Copyright Act

Sponsoring Agency

Copyright Board

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

Recent revisions to the Copyright Act provide that the Copyright Board is responsible for approving tariffs for the performance in public or the communication to the public by telecommunication of sound recordings of musical works (commonly referred to as the "neighbouring rights tariff"). Subparagraph 68.1(1)(a)(i) of the Act sets at $100 the amount of royalties that "wireless transmission systems" shall pay on their first 1.25 million $ of annual "advertising revenues". Subsection 68.1(3) of the Act gives the Board the power to define, by regulation, the term "advertising revenues", while subsection 68.1(5) gives the Governor in Council the power to define, by regulation, the term "wireless transmission system".

By prescribing the meaning of the term "advertising revenues", these Regulations define the rate base that will be used to determine which part of a wireless transmission system's revenues benefits from the $100 special royalty rate.

Alternatives

The alternative to let the Board interpret the meaning of the term "advertising revenues" in the course of approving the relevant tariffs was considered. However, given the importance of this term in the context of neighbouring rights, the Board considers it preferable to define it by Regulations.

Benefits and Costs

These Regulations allow to determine clearly and precisely that part of a wireless transmission system's revenues which will benefit from the $100 special royalty rate intended to reduce the financial impact on the radio broadcasting industry of the introduction of a new tariff. There will be no costs to the broadcasting industry, to the recording industry or to the Government, associated with these Regulations.

Consultation

On May 7, 1997, the Board asked for comments on the appropriateness of using the definition of "gross income" found in the tariff already applicable to radio stations for the telecommunication of musical works. On September 24, 1997, the Board circulated a draft definition on which it asked them to comment. On February 6, 1998, the Board addressed a number of questions aimed at clarifying the comments the Board had received from them.

The following organizations were consulted: Alliance of Canadian Cinema, Television & Radio Artists (ACTRA), American Federation of Musicians of the United States and Canada (AFM), Association canadienne de la radio et de la télévision de langue française (ACRTF), Association québécoise de l'industrie du disque, du spectacle et de la vidéo (ADISQ), Canadian Association of Broadcasters (CAB), Canadian Independent Record Production Association (CIRPA), Canadian Recording Industry Association (CRIA), Union des artistes (UDA), Society of Composers, Authors and Music Publishers of Canada (SOCAN), Artists' Rights Coalition (ARC), Société de gestion des droits des artistes-musiciens (SOGEDAM) and Neighbouring Rights Collective of Canada (NRCC). Comments were received from all these organizations. The following issues were addressed, among others.

Narrow vs Broad Definition

Several organizations asked that the definition be narrowed or broadened in a number of ways. The Board has opted for a general definition, which is more responsive to market changes. The Regulations will be further refined later on if they prove difficult to interpret.

What Are Advertising Revenues?

In their comments, the organizations took widely divergent views of what are advertising revenues and what are not.

Thus, CRIA asked for the inclusion of advertising revenues from allied or subsidiary businesses. CIRPA asked that the definition cover all forms of revenue and income emanating from a system's business while also allowing the inclusion of new forms of revenue not currently in existence without any need to change the Regulations. AFM asked that the rate base include revenues derived from the production of commercial announcements as well as revenues derived from the renting or leasing of facilities or personnel for such productions.

By contrast, CAB asked that the definition be articulated around the notion of "sale of airtime for broadcasting" rather than "value received to advertise". According to CAB, this would result in the inclusion of revenues from new musical programming services that are ancillary to the main broadcasting service, and the exclusion of revenues received for services other than airtime. CAB specifically asked the exclusion from the rate base of: (a) revenues from datacasting, (b) production revenues, (c) revenues for leasing personnel or space for the purposes of production, (d) the value of goods received from which the system does not derive a benefit (e.g. prizes), (e) contra arrangements that are not of real value to the system, (f) goods that the station would not have otherwise purchased, and (g) airtime that is exchanged for the promotion of a system or its programming in another medium.

The Board intends that all forms of advertising revenues be included in the rate base. Given the ongoing evolution in this market, it seems preferable to adopt a general definition and see how the market develops in the long run.

The Board also intends to exclude from the rate base revenues that are clearly not advertising revenues. The Regulations achieve this through the reference, in section 1, to "compensations ... received ... to advertise goods, services, activities or events, for broadcasting public interest messages or for any sponsorship." This excludes from the rate base: (a) subscription revenues, (b) production revenues, and (c) revenues for leasing personnel or space for the purposes of production.

As to compensations in kind, subsection 2(a), which provides that goods and services are valued at their fair market value, is sufficient to deal fairly with all the other concerns raised in this respect.

Section 1 and subsection 2(a) of the Regulations, when read together, also allow a system to exclude from the rate base the fair market value of the production services provided under a "turnkey" contract pursuant to which the system provides both advertising and production services.

Agency Commissions and Discounts

Some organizations asked that agency commissions be included in the rate base. Others asked that they be capped or expressly limited to "fair market value" commissions, so as to reduce the risk of collusion between persons not dealing at arm's length. The Board considered the imposition of a ceiling. However, nothing to date in the experience with similar tariffs leads to believe that this provision might result in abuses. The issue will be revisited if necessary.

One organization asked that discounts be expressly excluded from the rate base. The Regulations already achieve this, since discounts are never "received" by the system.

Bad Debts

NRCC asked that bad debts be included in the rate base, while CAB asked that they be excluded explicitly. The Board is of the view that bad debts should not be part of the rate base. Again, the Regulations already achieve this, since bad debts are never "received" by the system.

System vs Service

CAB asked that the definition be articulated around the concept of service rather than system. The Board cannot circumvent the Act by articulating the Regulations around a notion other than that which is used in the legislation.

Ambit of Subsection 2(b)

The application of the equivalent provision in SOCAN's Tariff 1.A is limited to groups of stations "which do not constitute a permanent network". Some organizations maintained that this proviso achieves several purposes. It ensures that broadcasting stations pay their share of the tariff and avoids double counting. It ensures that networks are not used to shelter advertising revenues from the rate base. Finally, it prevents revenue splitting that could result in revenue being sheltered under the $100 payment that should be fully subject to the tariff.

In the Board's view, there is no need to limit the application of the provision to non-permanent networks. Where any network does not have a separate licence, the network's revenues should be allocated among all the member stations using generally accepted accounting principles. If that proved not to be the fact in practice, the Board would amend the Regulations or allow for the adoption of a network tariff in order to correct the situation.

Interpretation Clause

Some organizations asked that an interpretation clause similar to that found in SOCAN's Tariff 1.A be included in the Regulations so as to specifically exclude from the rate base:

(a) the recovery of any amount paid to obtain the exclusive broadcast rights, if the system can establish that it was also paid normal advertising revenues;

(b) income accruing from investments, rents or any other business unrelated to the system's broadcasting activities; and

(c) amounts received for the production of a program that is commissioned by someone other than the system and which becomes the property of that person.

These organizations maintained that the provision would help clarify the Regulations and avoid disagreements. SOGEDAM took the opposite view, stating that such a provision should not be included in the Regulations, and that it was not needed given the wording of sections 1 and 2.

An interpretation clause of this nature is not necessary: such revenues are clearly not "advertising revenues", and the proposed Regulations are not intended to include them in the tariff base.

Audit Clause

NRCC asked for the inclusion of an audit clause in the Regulations, arguing that the tariff's audit clause would not allow a collective to verify whether any exclusion of revenues from the regulatory rate base was legitimate. The Board disagrees; the audit clause that will eventually be included in the tariff will provide collectives with sufficient means to verify whether the exclusion of any revenues from the rate base is legitimate.

Compliance and Enforcement

The Board will apply these Regulations defining "advertising revenues" in the context of its tariff-approval procedure. Enforcement mechanisms are not required.

Contact

Claude Majeau, Secretary, Copyright Board, 56 Sparks Street, Suite 800, Ottawa, Ontario K1A 0C9, (613) 952-8621 (Telephone), (613) 952-8630 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Copyright Board, pursuant to subsection 68.1(3) of the Copyright Act, proposes to make the annexed Regulations Defining "Advertising Revenues".

Any interested person may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. Any such representations must be addressed to Claude Majeau, Secretary, Copyright Board, 56 Sparks Street, Suite 800, Ottawa, Ontario K1A 0C9, and cite the Canada Gazette, Part I, and the date of this notice.

June 19, 1998

MICHEL HÉTU, Q.C.
Vice-President and Chief Executive Officer

REGULATIONS DEFINING "ADVERTISING REVENUES"

INTERPRETATION

1. In these Regulations, "system" means a wireless transmission system.

ADVERTISING REVENUES

2. (1) For the purposes of subsection 68.1(1) of the Copyright Act, "advertising revenues" means the total compensation in money, goods or services, net of taxes and of commissions paid to advertising agencies, received by a system to advertise goods, services, activities or events, for broadcasting public interest messages or for any sponsorship.

(2) For the purpose of calculating advertising revenues, goods and services shall be valued at fair market value.

(3) For purposes of subsection (1), when a system acts on behalf of a group of systems which broadcast a single event, simultaneously or on a delayed basis,

(a) any compensation paid by the system acting on behalf of the group of systems to a system that is part of the group is part of the advertising revenues of that system; and

(b) the difference between the compensation received by the system acting on behalf of the group of systems and any compensation referred to in paragraph (a), is part of the advertising revenue of the system which acts on behalf of the group.

COMING INTO FORCE

3. These Regulations come into force on the date on which they are registered.

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Footnote a

R.S., 1985, c. 39 (4th Supp.), s. 5

Footnote 1

SOR/96-170

Footnote 2

SOR/80-217

Footnote 3

SOR/96-170

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