Vol. 132, No. 36— September 5, 1998

Regulations Amending the Employment Insurance Regulations

Statutory Authority

Employment Insurance Act

Sponsoring Department

Department of Human Resources Development

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

This amendment is designed to extend the principle of first dollar coverage, first enunciated in Employment Insurance reform, to a broader group of workers. This amendment ensures that persons casually employed in connection with a census enumeration are included in insurable employment. Previously, persons employed in connection with a census enumeration were not covered unless they were regularly employed by that employer and worked a minimum of 25 days. Such persons will now be covered from the first hour they work and the first dollar they earn. This is consistent with the basic tenets of Employment Insurance (EI) reform as part of the hourly system of insurability.

Persons employed in connection with a referendum or election to public office will now be covered once they have worked 35 hours. Previously such persons were covered after they had worked 25 days. This is also consistent with an hours-based coverage system, while recognizing the casual nature of this type of employment and tenuous participation in the labour force (i.e. one day every two to four years).

Amendments have also been made concerning the employment of a person, other than as an entertainer, by an employer in connection with a circus, fair, parade, carnival, exposition or exhibition or other similar activity if the person is not regularly employed by that employer. The amendments are not substantive, but merely clarify existing practices.

Alternatives

No other alternative was considered for the amendment to revoke paragraph 8(1)(b) of the Employment Insurance Regulations because it is consistent with the basic principles of Employment Insurance reform as part of the first dollar, first hour system of insurability regardless of the duration of the period of employment.

As to the amendment to change the coverage in subparagraph 8(1)(c)(ii) of the Employment Insurance Regulations from 25 days to 35 hours, the alternative of 7 days rather than 25 days was considered, after consulting with Elections Canada. However, since EI legislation has gone to an hours-based system, the use of days is inconsistent.

Benefits and Costs

It is considered that the amendment will be cost neutral to the EI Program. It is estimated that the employer costs of extending coverage to persons employed in connection with a census enumeration or in connection with a referendum or election to public office will be under $4 million.

Expansion of coverage will assist part-time workers in using the additional insured hours of employment towards establishing a claim for EI benefits.

Consultation

Statistics Canada and Elections Canada were consulted and provided advice on how to balance the policy objective of improved coverage of EI with the administrative burden on employers. This led to the suggested approach.

These regulatory amendments were prepared by Insurance Policy in consultation with Legal Services, Strategic Policy and Revenue Canada. All concur with the format reflected in the Regulations.

In addition, the Employment Insurance Act and Employment Insurance Regulations, which gave rise to the change, was the subject of consultation with various government departments, Members of Parliament and interest groups, and was debated in the House of Commons and the Senate.

Provinces, municipalities and school boards were consulted in the spring of 1998.

These amendments are pre-published in Part ( of the Canada Gazette.

Compliance and Enforcement

Existing compliance mechanisms contained in Human Resources Development Canada's adjudication and control procedures will ensure that these changes are properly implemented and subsequently evaluated.

Contact

Nancy Fedorovitch, Senior Policy Advisor, Policy and Legislation Development — Insurance, Human Resources Development Canada, 140 Promenade du Portage, 9th Floor, Ottawa, Ontario K1A 0J9, (819) 997-8626 (Telephone), (819) 953-9381 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Canada Employment Insurance Commission proposes, pursuant to paragraph 5(6)(e) of the Employment Insurance Act (see footnote a), to make the annexed Regulations Amending the Employment Insurance Regulations.

Interested persons may make representations concerning the proposed Regulations within 60 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice and be addressed to Nancy Fedorovitch, Policy and Legislation Development, Insurance Branch, Human Resources Development Canada, 140 Promenade du Portage, 9th Floor, Ottawa, Ontario K1A 0J9.

August 26, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE EMPLOYMENT INSURANCE REGULATIONS

AMENDMENTS

1. (1) The portion of subsection 8(1) of the Employment Insurance Regulations (see footnote 1) before paragraph (a) is replaced by the following:

8. (1) Subject to subsections (2) to (4), the following employments are excluded from insurable employment:

(2) Subsection 8(1) of the Regulations is amended by adding the word "and" at the end of paragraph (a) and by repealing paragraph (b).

(3) Subparagraph 8(1)(c)(ii) of the Regulations is replaced by the following:

(4) Subsection 8(2) of the Regulations is replaced by the following:

(2) Where an employment that has been excluded from insurable employment under paragraph (1)(a) or (c) becomes a regular employment, the employment is insurable employment beginning on the day or at the hour, as the case may be, that the employment became a regular employment.

(3) Where a person has been employed by the same employer in one or more employments that have been excluded from insurable employment under paragraph (1)(a) and the total period of those employments exceeds six days in the same year, the employments, taken together, are insurable employment beginning on the day when the total period of employment began.

(4) Where a person has been employed by the same employer in one or more employments that have been excluded from insurable employment under paragraph (1)(c) and the total period of those employments exceeds 34 hours in the same year, the employments, taken together, are insurable employment beginning at the hour when the total period of employment began.

COMING INTO FORCE

2. These Regulations come into force on January 1, 1999.

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Status of the Artist Act Professional Category Regulations

Statutory Authority

Status of the Artist Act

Sponsoring Department

Department of Human Resources Development

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

These Regulations prescribe certain categories of professional self-employed artists who will be entitled to benefit from the provisions of the Status of the Artist Act. This Act provides a legal framework for collective bargaining between self-employed artists and producers within the federal jurisdiction.

The Status of the Artist Act (S.C., 1992, c. 33) explicitly defines certain categories of self-employed professionals who fall within its jurisdiction. These categories include authors, directors and performers of artistic works. The Act also empowers the Governor in Council to make regulations to include other categories of artists within the coverage provided by the Act, namely those who contribute to the creation of any production in the performing arts, music, dance and variety entertainment, film, radio and television, video, sound-recording, dubbing or the recording of commercials, arts and crafts, and visual arts.

Since commencing operations in May 1995, the Canadian Artists and Producers Professional Relations Tribunal, which is responsible for administering the collective bargaining provisions of the Act, has received over 28 applications for certification of sectors suitable for collective bargaining within the cultural industry. Some of the sectors for which certification has been requested include professions which are not currently covered by the Status of the Artist Act. In most cases, the proposed sectors are ones for which scale agreements have been negotiated on a voluntary basis between artists' associations and producers. Scale agreements establish the minimum terms and conditions of engagement for self-employed artists providing services to producers signatory to the agreement. Without a certification issued under the Status of the Artist Act to confirm bargaining rights for a specified sector, these voluntary agreements can be difficult to enforce.

The Status of the Artist Act directs the Tribunal to consider a number of factors when it determines the suitability of a sector for collective bargaining. Among these are community of interest and the history of professional relations. In the absence of regulations prescribing the additional categories of self-employed professionals who should be entitled to the protection of the Act, the Tribunal is unable to give full effect to this statutory direction.

A decision as to the other professional categories to be prescribed by regulation will allow the Tribunal to make final determinations on a number of pending applications for certification and will allow additional associations to come forward to seek certification.

At the time the Status of the Artist Act was considered by Parliament, it was determined that rather than defining all of the possible artistic professions in the statute, a more appropriate course would be to leave a number of professional categories to be prescribed by regulation in order to allow an opportunity for consultation with client groups on the issue as well as permitting the eventual inclusion of new or emerging professions in response to technological and employment changes in the cultural industries.

The proposed Regulations would have the effect of allowing a number of professions which contribute in a creative manner to an artistic production to take advantage of the provisions of the Status of the Artist Act. The proposed Regulations explicitly exclude those who do not contribute to the creative aspects of an artistic production.

Alternatives

1. Status quo

The status quo is not a recommended alternative as the expressed intent of the Government at the time of debate on the Bill introducing the Act was to include other categories of artists under the Act after consultation with the client groups. Some of these professions are already covered by voluntarily negotiated scale agreements between artists associations and producers, thereby providing evidence of a historical relationship among various professions.

2. Other Proposals

The approach taken in this proposal to define the other categories of professional artists is on the basis of the function or activity carried out. An alternative approach would be to list each occupational category by job title. This alternative was not chosen because job titles are not used consistently by different producers to refer to the same functions. As well, the use of job titles would necessitate regular revisions to the Regulations as new job titles were developed.

The recommended proposal achieves a good balance between the interests of the client groups. Those artistic professional activities which can reasonably be demonstrated to contribute to the creation of a production have been included, while professions contributing to a production in a manner which does not involve artistic creativity, for example accounting, have been excluded.

Benefits and Costs

The artists' community will benefit by having additional categories of self-employed artists included in the legal framework for collective bargaining as set out in the Status of the Artist Act. Through collective bargaining, these self-employed professionals will have an opportunity to improve their terms and conditions of engagement.

The inclusion of additional categories of artists in a collective bargaining regime creates a potential for some additional costs to producers. On the other hand, producers will benefit from greater certainty in their professional relations with self-employed artists and a reduction in the cost of negotiating individual agreements with each artist. By providing a more stable framework for professional relations, increased production will be facilitated.

By adopting these Regulations, the Government will make progress toward fulfilling a long-standing commitment to improve the socio-economic status of artists in Canada. An improved status for artist benefits society as a whole. As artists' economic situation improves, they are able to devote more time to their artistic pursuits, which assist in promoting our country's cultural identity.

Consultation

Early notice was provided through the 1993, 1994 and 1995 publication of the federal government's regulatory plan, in anticipation of the coming into force of the Status of the Artist Act. Notice was again provided in the 1996 and 1997 Federal Regulatory Plan, under Proposal No. LAB/93-1-I. A discussion document outlining considerations with respect to the development of this proposal and requesting comments was distributed to some 70 affected artists associations, producers and producer associations in the federal jurisdiction.

The proposed Regulations were pre-published in Part I of the Canada Gazette on April 1997. Submissions were received from several artists associations and producers associations. Given the concerns expressed regarding the scope of the Regulations and requests for additional consultations, public consultations were held in Ottawa, Toronto and Montréal in September 1997. Following the public consultations, the initial text of the proposed Regulations was substantially altered both in coverage and terminology, to take into consideration the various comments and submissions received. The Minister of Canadian Heritage has been consulted as required by section 56 of the Status of the Artist Act.

Compliance and Enforcement

Compliance and enforcement provisions of the Act will apply to artists associations representing the additional categories of artists proposed and to producers and producers associations who engage these independent artists.

Contact

Sylvia Garcia Soria, Senior Industry Research Officer, Federal Mediation and Conciliation Service, Human Resources Development Canada, Place du Portage, Phase II, Ottawa, Ontario K1A 0J2, (819) 953-7852 (Telephone), 953-1028 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council proposes, pursuant to subparagraph 6(2)(b)(iii) and section 56 (see footnote b) a of the Status of the Artist Act (see footnote c), to make the annexed Status of the Artist Act Professional Category Regulations.

The proposed effective date of these Regulations is the date of registration thereof with the Clerk of the Privy Council.

Interested persons may make representations concerning the proposed Regulations to Sylvia Garcia Soria, Federal Mediation and Conciliation Service, Human Resources Development Canada, Place du Portage, Phase II, Ottawa, Ontario K1A 0J2, within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, the date of publication of this notice and the short title of the proposed Regulations.

The representations should stipulate the parts thereof that should not be disclosed pursuant to the Access to Information Act, pursuant to sections 19 and 20 of that Act, the reason why those parts should not be disclosed and the period during which those parts should remain undisclosed. The representations should also stipulate the parts thereof in respect of which there is no objection to disclosure pursuant to the Access to Information Act.

August 26, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

STATUS OF THE ARTIST ACT PROFESSIONAL CATEGORY REGULATIONS

INTERPRETATION

1. The definitions in this section apply in these Regulations.

"Act" means the Status of the Artist Act. (Loi)

"creation of a production" means the creation of a production in the performing arts, music, dance and variety entertainment, film, radio and television, video, sound-recording, dubbing or the recording of commercials. (création d'une production)

PROFESSIONAL CATEGORIES

2. (1) Subject to subsection (2), in relation to the creation of a production, the following professional categories comprising professions in which the practitioner contributes directly to the creative aspects of the production by carrying out one or more of the activities set out in paragraph (a), (b), (c), (d) or (e), respectively, are prescribed as professional categories for the purposes of subparagraph 6(2)(b)(iii) of the Act:

(a) category 1 — camera work, lighting and sound design;

(b) category 2 — costumes, coiffure and make-up design;

(c) category 3 — set design;

(d) category 4 — arranging, orchestrating and music copying; and

(e) category 5 — research for audiovisual productions, editing and continuity.

(2) The professional categories prescribed by subsection (1) do not include any profession in which the practitioner of the profession

(a) carries out, in connection with an activity referred to in subsection (1), the activities of accounting, auditing, legal, representation, publicity or management work or clerical, administrative or other support work; or

(b) is a person referred to in subparagraph 6(2)(b)(i) of the Act or carries out an activity referred to in subparagraph 6(2)(b)(ii) of the Act.

COMING INTO FORCE

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

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Regulations Amending the Canada Mining Regulations

Statutory Authority

Territorial Lands Act

Sponsoring Department

Department of Indian Affairs and Northern Development

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

In the Northwest Territories (N.W.T.), the federal government, through the Department of Indian Affairs and Northern Development (DIAND), is responsible for the management of Crown lands, including minerals, under the Territorial Lands Act and its regulations, which include the Canada Mining Regulations (CMR). The CMR requires that each mine located on mineral leases granted under the Regulations pay to the Crown a royalty based on the "value of the output" of the mine less certain deductions and allowances specified in the Regulations. This also applies to vacant Crown land in Nunavut and will continue to apply when Nunavut becomes an official territory in 1999.

In addition to a number of housekeeping amendments to the provisions dealing with the location of mineral claims, the leasing of mineral rights and the review by DIAND's Minister of decisions by officials named in the CMR, these Regulations include the following significant changes to the mineral leasing and royalty provisions of the CMR:

Alternatives

Leaving the existing CMR unchanged is not an acceptable option. The royalty provisions of the CMR were last amended in 1977. The effective royalty rate, levied by the existing CMR, is significantly lower than the effective rate of mining tax/duty in any provincial mining jurisdiction, and as such does not provide the Crown with a fair return for the minerals mined from Crown land in the N.W.T. Moreover, the existing CMR do not contain provisions necessary to deal with the valuation of diamonds for royalty purposes.

A number of alternatives to amending the current royalty provisions of the CMR were considered including replacing the royalty regime in the CMR with one modelled on the mining tax regime in British Columbia, which is the only Canadian jurisdiction that has a regime significantly different from the traditional mining tax/duty/royalty levied in all other Canadian jurisdictions. While the British Columbia mining tax regime does have a number of merits, the transition from the current system would require significant additional resources. The objectives of the federal government could be met with the use of considerably fewer resources by amending the current regime in the CMR. A specific royalty regime for diamonds was also considered. However, diamond mining is not so significantly different from the mining of other minerals as to warrant a different royalty structure. There is no justification for levying a different rate of royalty on two mines just because they happen to produce different minerals.

Benefits and Costs

In order to analyse the impact of the proposed amendments to the royalty provisions of the CMR on the mining industry, DIAND compared the effective rates of the current and proposed royalty regimes in the CMR against those of the mining tax/duty regimes for British Columbia, Manitoba, Ontario, Quebec and Newfoundland, as well as the combined effective rate of royalty and income tax in the N.W.T. against the combined effective rates of mining tax/duty in these provinces and in selected international jurisdictions. DIAND calculated effective royalty and income tax rates using the change in the Internal Rate of Return when tax/royalty regimes were applied to five mine models: a high and a low profit base metal mine, a high and a low profit gold mine and the Ekati diamond mine of BHP Diamonds Inc.

The proposed amendments to the CMR would increase the effective rate of royalty on a mining project in the N.W.T. In the cases of the gold and base metal mine models, the effective rate of royalty is still significantly below that which the projects would bear in the provinces. The combined effective rate of royalty and income tax is still competitive with the effective rates of profit-based taxes in major foreign mining jurisdictions.

There should be no financial impact on the amount of mining royalty paid by the existing mines, as a whole, in the N.W.T., as a result of the proposed amendments. The proposed amendments would, however, increase the projected mining royalty collected from the diamond mine, scheduled to begin production this year to $685 million over the first 21 years of the mine life from $457 million under the current provisions. This increase would be almost entirely from the elimination of the three-year royalty free period and the increase in the maximum rate from 12 percent to 14 percent. A similar increase is predicted in the projected mining royalty from the next diamond mine being developed in the N.W.T.

Aboriginal groups with signed comprehensive land claim settlements would benefit from increased payments from the resource royalty sharing provisions.

By expanding the assets eligible for depreciation, residential facilities at remote northern mines would be eligible for depreciation allowance. The introduction of a development allowance allows mines to capitalize development expenditures incurred after the start of production and claim them as they have income, rather than losing a deduction for those expenditures in years when they do not have sufficient income, as under the current regulations. The increase of the depreciation allowance rate, as well as the amortization rate for development allowance expenditures, from 15 percent per annum to 100 percent per annum will allow mine operators to recover all capital expenditures on a mine prior to paying royalty to the Crown on the production from the mine.

By introducing the mine reclamation trust contribution allowance, mining companies will have the opportunity to claim a deduction for monies eventually used for reclamation which could take place after mine closure. Under the present Regulations, if the monies were spent after mine closure there would be no revenue against which to claim the deduction.

To allow cash payments under an Impact and Benefit Agreement as a deduction for royalty purposes, would result in payments to certain communities reducing the resource royalty available for sharing with all groups with comprehensive land claims agreements within a land claims settlement area, and would effectively amount to the federal government unilaterally rewriting the resource revenue sharing formulae in the existing comprehensive land claim settlements.

Unlike most other mineral commodities, where the value can easily be determined on the basis of quantity and a price quoted on a recognized commodities exchange, the price of rough diamonds varies with the size, shape, colour and quality of each individual stone. Moreover, the prices of rough diamonds are not set on open public markets, but in private transactions between the Central Selling Organization of De Beers Centenary AG, which controls roughly 70 percent of the world's supply of rough diamonds, and its clients, and between dealers and manufacturers in the "free market" centred in Antwerp, Belgium. This lack of transparency in the market for rough diamonds makes it impossible to value diamonds for mining royalty, taxation or profit sharing purposes without the assistance of a specialized diamond valuator. For this reason, the governments of almost all major diamond producing countries retain the services of a government diamond valuator and insist that diamond production be valued prior to sale or export. A government diamond valuation firm for the Ekati diamond mine would be hired at a cost of approximately US $2 million per year.

Consultation

The February 1995 federal budget directed DIAND to undertake a comprehensive review of its natural resource management legislation to "...increase revenues and ensure a fair return to the Crown." In response to this direction, DIAND together with the federal departments of Finance, Natural Resources and National Revenue, and the Government of the Northwest Territories undertook a detailed review of the mining royalty regime in the CMR. This review resulted in a series of proposed changes to the mining royalty and mineral leasing provisions of the CMR which were set out in detail in a public discussion paper released by the Minister of DIAND in August 1996.

Since the fall of 1996 DIAND has consulted extensively with the mining industry, Aboriginal groups and other interested parties, first on the basis of the discussion paper, and beginning in June 1998, on the basis of a legal draft of the proposed amendments prepared by the Department of Justice.

Aboriginal groups consulted on the proposed changes to the royalty regime were generally supportive of the changes, in particular those groups which would see increased payments from the resource royalty sharing provisions of comprehensive land claim settlements. Most of the concerns raised by the mining industry during the consultations on the discussion paper and the draft amendments have been addressed. The industry seems reasonably content with the proposed amendments with two exceptions: the increase in the maximum royalty rate to 14 percent and that cash payments made to an Aboriginal group under an Impact and Benefit Agreement (IBA) would not be deductible for royalty purposes. While these industry concerns are not addressed in the proposed amendments, the proposed royalty regime would have an effective rate which for most mines would be below the average mining tax/duty rates in the provinces and would result in a combined effective rate of royalty and income tax which is still competitive with other international mining jurisdictions. Cash payments made under an IBA would not be deductible because this would allow the payments made to one Aboriginal group to reduce the royalty available for the sharing with all Aboriginal communities within a land claim settlement area. To allow IBA cash payment deductibility would have the effect of the federal government unilaterally rewriting the resource royalty sharing formulae in existing comprehensive land claim settlements.

Compliance and Enforcement

The amendments to the mineral leasing provisions would prevent the transfer of leases where royalty is due and unpaid, thus forcing mine operators to settle any outstanding royalty obligations to the Crown, before vending leases. In addition to these changes to the mineral leasing provisions, the interest provisions in section 155.1 and the deduction and set off provisions of section 155 of the Financial Administration Act and subsection 30(1) of the Territorial Lands Act, which makes any violation of the CMR an offence punishable on summary conviction, would be used to enforce the royalty provisions of the CMR.

Contact

Robert Lauer, Chief, Financial Analysis and Royalty Administration, Mineral Resources, Department of Indian Affairs and Northern Development, Les Terrasses de la Chaudière, Ottawa, Ontario K1A 0H4, (819) 994-6772.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to sections 8 and 12 of the Territorial Lands Act, proposes to amend the Canada Mining Regulations.

Interested persons may make representations concerning the proposed Regulations to the Department of Indian Affairs and Northern Development within 30 days of the date of publication of this notice. All such representations should cite the Canada Gazette, Part I, the date of publication of this notice and be sent to: Mr. Robert Lauer, Chief, Financial Analysis and Royalty Administration, Les Terrasses de la Chaudière, Room 600, Ottawa, Ontario K1A 0H4.

Copies of the proposed amendments to the Canada Mining Regulations are available from the above-mentioned person.

August 26, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE CANADA MINING REGULATIONS

AMENDMENT

1. Subsection 65(3) and (4) of the Canada Mining Regulations (see footnote 2) are repealed.

COMING INTO FORCE

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

[36-1-o]

Regulations Amending the Reporting of Exported Goods Regulations

Statutory Authority

Customs Act

Sponsoring Department

Department of National Revenue

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

The amendment to section 5 of the Reporting of Exported Goods Regulations corrects the English version to ensure it is consistent with the French version. The English version will now require an individual to present a permit to Customs Officials at the border. Presently, there is no requirement in the English version of the Regulations for individuals to do this.

Alternatives

No alternatives have been considered, as the only legislative means available to address this situation is to amend the Regulations.

Benefits and Costs

This change will have no negative impact on exporters or the economy.

Consultation

This amendment reflects a recent court decision and is intended to ensure the English and French versions of section 5 of the Regulations are consistent.

Early notice was provided in the 1997 Federal Regulatory Plan, under proposal No. RC/R-29-L.

Compliance and Enforcement

These Regulations will facilitate compliance with customs requirements since it will clarify provisions set out in section 5.

Contact

Mr. D. Waldie, Director, Export Process Division, Operational Policy and Coordination Directorate, Customs and Trade Administration Branch, Revenue Canada, Connaught Building, 1st Floor, 555 Mackenzie Avenue, Ottawa, Ontario K1A 0L5, (613) 954-6986 (Telephone), (613) 946-0241 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 164(3) of the Customs Act(see footnote d), that the Governor in Council, pursuant to section 95 and paragraph 164(1)(i) (see footnote e) of that Act, proposes to make the annexed Regulations Amending the Reporting of Exported Goods Regulations.

Interested persons may make representations with respect to the proposed Regulations to the Minister of National Revenue, Connaught Building, 7th Floor, 555 Mackenzie Avenue, Ottawa, Ontario K1A 0L5, within 60 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice. The representations should stipulate those parts of the representations that should not be disclosed pursuant to the Access to Information Act, in particular, pursuant to sections 19 and 20 of that Act, the reason why those parts should not be disclosed and the period during which those parts should remain undisclosed. The representations should also stipulate those parts in respect of which there is consent to disclosure pursuant to the Access to Information Act.

August 26, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE REPORTING OF EXPORTED GOODS REGULATIONS

AMENDMENT

1. Section 5 (see footnote 3) of the English version of the Reporting of Exported Goods Regulations (see footnote 4) is replaced by the following:

5. For the purposes of these Regulations, the exporter of goods shall provide to the chief officer of customs on or before the day of exportation any information and all certificates, licences, permits or other documents relating to the goods that are required under the Act or any regulations made pursuant thereto, or under any other Act of Parliament or regulations made pursuant thereto that prohibit, control or regulate the exportation of goods.

COMING INTO FORCE

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

[36-1-o]

Regulations Amending the Ships' Stores Regulations

Statutory Authority

Customs Tariff

Sponsoring Department

Department of National Revenue

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

The Ships' Stores Regulations are amended to reduce the reasonable quantity of tobacco and tobacco sticks to 200 grams and 200 sticks, respectively. The amendment follows similar reductions in personal exemptions provided to travellers to Canada.

The amendment will ensure common references to 200 grams of tobacco and 200 tobacco sticks which will foster voluntary compliance and reduce customs administrative costs.

In early October, 1996, the Honourable Paul Martin, Minister of Finance, reduced the quantity of such tobacco products that could be entered duty-free by non-resident travellers. Ministerial regulations affecting similar entitlements of resident travellers have also been changed.

Alternatives

The amendment is the only means to support the government objectives of safeguarding Canadian health and reducing costs associated with regulatory compliance.

Benefits and Costs

This amendment will reduce costs to Government by ensuring similar reference quantities are used in various instruments, and benefit the importing/exporting community through use of consistent and transparent rules.

Consultation

The Department of Finance was consulted with respect to this change. Prepublication in the Canada Gazette, Part I, will ensure the importing/exporting public will have the opportunity to comment on the planned amendment, which is consequential to other announced regulatory amendments.

Compliance and Enforcement

This change will facilitate compliance and enforcement of the tobacco regulatory framework as it will ensure a consistent definition of reasonable quantities. The changes will therefore promote voluntary compliance and reduce enforcement costs. Enforcement will be ensured by existing departmental measures.

Contact

Mr. P. Wallace, Chief, Warehouse Licensing, Licensing and Revenue Accounting Division, Customs Border Services Branch, Revenue Canada, Connaught Building, 5th Floor, Ottawa, Ontario K1A 0L5, (613) 954-7193.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council proposes, pursuant to paragraph 99(g) of the Customs Tariff (see footnote f), to make the annexed Regulations Amending the Ships' Stores Regulations.

Interested persons may make representations to the Minister of National Revenue concerning the proposed Regulations within 60 days after the date of publication of this notice. All such representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to the Minister of National Revenue, Connaught Building, 7th Floor, 555 Mackenzie Avenue, Ottawa, Ontario K1A 0L5. The representations should stipulate the parts thereof that should not be disclosed pursuant to the Access to Information Act and, in particular, pursuant to sections 19 and 20 of that Act, the reasons why those parts should not be disclosed and the period during which those parts should remain undisclosed. The representations should also stipulate the parts thereof for which there is no objection to disclosure pursuant to the Access to Information Act.

August 26, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE SHIPS' STORES REGULATIONS

AMENDMENT

1. The definition "reasonable quantity" in section 2 of the Ships' Stores Regulations (see footnote 5) is replaced by the following:

"reasonable quantity" with respect to tobacco products, means a quantity not exceeding 200 cigarettes, 50 cigars, 200 grams of manufactured tobacco and 200 tobacco sticks; (quantité raisonnable)

COMING INTO FORCE

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

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Foreign Companies Prescribed Transactions Regulations

Statutory Authority

Insurance Companies Act

Sponsoring Agency

Office of the Superintendent of Financial Institutions

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

The proposed Regulations would exempt foreign insurance companies from having to obtain the Minister's approval for reinsurance transactions entered into the ordinary course of business in Canada. These Regulations will be made under the authority of subsection 587.1(3) and section 703 of the Insurance Companies Act.

The recently promulgated Bill C-82 included a requirement on the part of foreign insurance companies to obtain the Minister's approval in respect of transactions involving the transfer, sale, purchase and reinsurance of Canadian insurance policies. The purpose of this amendment was to give Canadian policyholders of foreign insurance companies similar protection to that already given policyholders of Canadian insurance companies. However, the amendment went beyond this purpose to apply to all reinsurance transactions including those entered into the ordinary course of business. Given that Canadian insurance companies are specifically exempted from having to obtain the Minister's approval for these ordinary course of business transactions (section 256 of the Insurance Companies Act) it was deemed appropriate to propose these Regulations to correct this inconsistency.

Alternatives

Should the Government choose not to go forward with the proposed Regulations, foreign insurance companies would be unfairly disadvantaged vis-à-vis Canadian insurance companies. As a result, no other alternative was considered.

Benefits and Costs

The promulgation of these Regulations will generate no additional costs to either the Office of the Superintendent of Financial Institutions (OSFI) or to foreign insurance companies. It is anticipated that a reduction in administrative type costs, for both OSFI and foreign insurance companies, will result from the promulgation of these Regulations.

Consultation

Chief agents of federally registered foreign insurance companies as well as Canadian insurance associations (i.e., Canadian Life and Health Insurance Association, Insurance Bureau of Canada and The Fraternal Association) were advised of OSFI's intention to promulgate these Regulations and were asked to provide their views and/or comments. No adverse comments were received during the consultation process.

Compliance and Enforcement

These Regulations will not have a material impact on OSFI's resources or on its ability to supervise federally regulated financial institutions.

Contact

Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, (613) 990-7472 (Telephone), (613) 998-6716 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to subsection 587.1(3) (see footnote g) and section 703 (see footnote h) of the Insurance Companies Act (see footnote i), proposes to make the annexed Foreign Companies Prescribed Transactions Regulations.

Any interested persons 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 Mr. Charles P. Johnston, Regulations Officer, Legislation and Precedents Division, Office of the Superintendent of Financial Institutions, 255 Albert Street, Ottawa, Ontario K1A 0H2, and cite the Canada Gazette, Part I, and the date of this notice.

August 26, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

FOREIGN COMPANIES PRESCRIBED TRANSACTIONS REGULATIONS

GENERAL

1. For the purpose of subsection 587.1(3) of the Insurance Companies Act, reinsurance transactions entered into by a foreign company in the ordinary course of its business are transactions for which the approval of the Minister of Finance under subsection 587.1(2) of that Act is not required.

COMING INTO FORCE

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

[36-1-o]

Footnote a

S.C., 1996, c. 23

Footnote 1

SOR/96-332

Footnote b

S.C., 1995, c. 11, s. 41

Footnote c

S.C., 1992, c. 33

Footnote 2

C.R.C., c. 1516

Footnote d

R.S., 1985, c. 1 (2nd Supp.)

Footnote e

S.C., 1992, c. 28, ss. 30(1)

Footnote 3

SOR/88-85

Footnote 4

SOR/86-1001

Footnote f

S.C., 1997, c. 36

Footnote 5

SOR/96-40

Footnote g

S.C., 1997, c. 15, s. 303

Footnote h

S.C., 1997, c. 15, s. 330

Footnote i

S.C., 1991, c. 47

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