Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 11 - Evidence - Meeting of May 3, 2012
OTTAWA, Thursday, May 3, 2012
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 11:30 a.m. to examine the document entitled: Passport Canada's Fee-for-Service proposal to Parliament, dated March 2012, pursuant to the User Fees Act, S.C. 2004, c. 6, sbs. 4(2).
Senator A. Raynell Andreychuk (Chair) in the chair.
The Chair: Honourable senators, I am calling the meeting the order.
This is the Standing Senate Committee on Foreign Affairs and International Trade. We are continuing our study of a document entitled: Passport Canada's Fee-for-Service Proposal to Parliament, dated March 2012, pursuant to the User Fees Act, S.C. 2004, c. 6, sbs. 4(2).
We have some witnesses before us today. I will introduce them shortly, but Senator Nolin has asked for an intervention at this time.
Senator Nolin: Thank you, Madam Chair. Yesterday, we heard witnesses from the Department of Foreign Affairs and International Trade explain what was involved in consular fees. We also heard representatives from the Office of the Auditor General of Canada explain how they audited these consular fees in the past. I gather that it was somewhat at my request that the committee heard these witnesses since I had put questions to the people from Passport Canada when they appeared last week.
I realize, Madam Chair, and I would like to mention to my colleagues, that the issue of consular fees was not included in the request submitted to us by Passport Canada. It must be taken into account, since the $25 in question will be included in the cost of obtaining a passport, whether for ten or five years, but we were not asked to address the structure and breakdown of this $25, and I apologize to my colleagues — I realized this yesterday evening. It was not asked of us.
I wanted to make this clarification before we proceeded with today's witnesses.
Senator Robichaud: Madam Chair, on this point I realize that such a request is not before us because Passport Canada is speaking of passports only, not passports to be delivered to consulates where consular fees will be charged, which is outside the responsibility of Passport Canada.
When Senator Nolin says that the matter is not before us, I agree that it was not included in the request submitted to us. However, representatives of the Office of the Auditor General specifically told us that consular fees covered more than the expenses incurred. They want to know how these figures were reached. I know that for Passport Canada, it is a separate issue, but I cannot ignore the fact that people raised the issue of the $25. Although it should not be before us, witnesses nonetheless brought it before us by saying that it should somehow be examined.
Senator Nolin: I stand to be corrected, but I understand from the testimony from the Auditor General's people yesterday that in the review they made in 2008 they asked for a new formula, and they recognized that there is a new formula. They are not convinced that the formula is producing the result anticipated and time will tell.
The Chair: I am not quite sure that is correct. They said they have not audited the new —
Senator Nolin: That is my way to say they are not convinced.
The Chair: That is not the fault of DFAIT or the Auditor General and that is why I asked the question: When do they anticipate the next audit? They said if they thought there was a risk or something unusual, then they would bring forward. Otherwise, they will do it in their routine and they had some information that there was a new formula.
It is to be discussed. I think it is all background as a Foreign Affairs Committee, and it is also background to this study. However, you are quite right today to say that we vote on a particular portion of the fees. Thank you for the clarification.
We are now going to turn to our witnesses.
From the Canadian Snowbird Association — an association I would dearly love to belong to, but we are here in Canada working 12 months of the year — we are very delighted to have Bob Slack, President, Canadian Snowbird Association and Michael MacKenzie, Executive Director, who has come from Toronto.
Gentlemen, welcome to the committee. I know you have an opening statement. I would ask you to proceed with it. As you can see, there is a lively debate and discussion among senators so I am sure there will be many questions.
Bob Slack, President, Canadian Snowbird Association: Thank you. As you stated, I am the president of the Canadian Snowbird Association and Mr. MacKenzie is our executive director.
I would like to thank you for affording us the opportunity to speak to you about Passport Canada's fee-for-service proposal.
Before I do that, please allow me to provide you with some brief information about who we are and what we do.
The Canadian Snowbird Association is a 70,000 member national not-for-profit advocacy organization. We are dedicated to actively defending the rights and privileges of travelling Canadians. This past March, we celebrated our twentieth anniversary as an association.
At this point in time, the majority of our members are seniors who are living on fixed or limited incomes. However, as the demographics are changing, we are now seeing many more boomers joining our organization.
Many of our concerns on this side of the border deal with access to emergency health and drug coverage for Canadian travellers. When approaching U.S. officials, our concerns deal primarily with border crossing regulations and the amount of time Canadians are legally permitted in the United States.
The Canadian Snowbird Association has always recommended that Canadians carry a passport. That was even before it was a requirement to travel to the United States. We feel it is the best form of identification when crossing any border.
For a number of years, we requested the federal government extend the validity of Canadian passports from five years to 10 years, in the hopes that this would reduce the cost and increase the convenience of bearing a passport.
In the spring of 2010, Passport Canada invited us to participate in round-table discussions, which we did. We found them to be quite useful and, quite frankly, refreshing.
As a national organization, the people we represent come from all over Canada. Many of our members live in large urban centres, and many of our members live in smaller rural communities. While we appreciate the efforts Passport Canada has made to increase customer service in getting a passport, it is not exactly the most pleasant thing that one could do with their day. It remains particularly challenging for many residents from smaller communities.
It is this issue of convenience that we find to be the most attractive and compelling reason to move to the 10-year passport, at least from the point of view of the Canadian traveller.
As an organization primarily composed of seniors on fixed or limited incomes, our concern has always been around cost. We would ideally like to see some form of seniors' discount with respect to passports. I believe it has been discussed at committee level here before.
As a cost recovery organization, we do recognize the economic reality that confronts Passport Canada. During the round-table discussions, we were surprised to learn that Australia charges $233 for a 10-year ePassport. Our initial concern was this might be the number that Passport Canada was looking at. On the other end of the spectrum, the United Kingdom charges $122 for a 10-year ePassport. I think it is safe to say we were hopeful the proposed fee increases would result in a price closer to the U.K. model than to the Australian model.
Having said that, in addition to the convenience, the longer validity period at a proposed cost of $160 means the cost for a 10-year ePassport will be $16 per year, which is actually lower than the current cost per year of $17.40. We as an organization think this strikes a fair and reasonable balance, and we support it.
Furthermore, in order to keep the price of the passport as low as possible, we support the proposed fees for certain administrative services that are currently offered for free, including the replacement cost of lost or stolen travel documents.
Finally, we are concerned with the other tens of thousands of Canadians who wish to travel to countries like the United States for shorter duration holidays. These holidays could possibly be to visit parents, grandparents, et cetera, who are in their snowbird winter residences.
There is no doubt a financial burden exists, especially for a typical family of four obtaining passports for short-term travel. We are pleased to see that Passport Canada has taken this into account and will continue to offer children's passports at 60 per cent of the price of the adult five-year passport. Some call for a steeper reduction for children, some for no reduction. Again, we think Passport Canada's proposal strikes the right balance.
We certainly appreciate the opportunity to share our views with all of you, and we are happy to take any questions you might have.
The Chair: Thank you, Mr. Slack.
I presume, Mr. MacKenzie, you are here to answer questions?
Michael MacKenzie, Executive Director, Canadian Snowbird Association: Yes.
Senator Fortin-Duplessis: First of all, welcome to our committee, and I can assure you that it is refreshing to hear positive comments because we seldom do. Like you, I am pleased with the introduction of ePassports, primarily because it extends the validity period, reduces the amount of paperwork and makes it easier for people to travel. If we make life easier, especially in a world that encourages the movement of goods and people — just consider the fact that we are in the process of negotiating free trade between Europe and Canada — this will genuinely be helpful. The more we simplify our methods and regulations, the better.
I found out that you have participated in round tables. I heard that you visited the MPs' riding office. I would like to be told again whether you are content with the consultation process. I imagine that your association sensed that some progress was made, and so could you give me an answer on that?
Mr. MacKenzie: Indeed we were. We are not often used to being consulted on things like this. With some of the past experiences we have had, when you are consulted, the train has already left the station. We felt that during this consultation, people were legitimately interested in our views, and we saw a lot of things we suggested reflected in the proposal.
From our point of view, it was refreshing. I can assure you that we kept our members — we have 70,000 — updated throughout the process. They were very engaged on this. We really felt that the committee was interested in our input, and we appreciated that.
Mr. Slack: Further to what Mr. MacKenzie just said, the quicker this 10-year passport comes about, the happier our members will be. As I travel Canada and the U.S. meeting with our members, that is one of the questions that is foremost, "When will we get that 10-year passport?" We keep saying, "It is coming." It looks like 2013 now. We are keeping our fingers crossed.
Senator D. Smith: You gave us the numbers for an ePassport of $233 for 10 years in Australia and $122 for 10 years in the U.K. Are those adult numbers or senior numbers? Do they have a separate senior rate, or are seniors at the adult rate?
Mr. MacKenzie: To the best of my knowledge, they are at the adult rate. I do not know for sure.
When we went into these consultations — again, we would obviously appreciate a reduced fee — we were looking for something realistically in the middle of the road. I think if the rate proposed had been closer to the Australian model, that would not have gone over well with our members. We think $160 strikes the right balance.
Senator D. Smith: Right, which you point out correctly is about $16 per year. If you were getting that rate, do you think you would need a seniors' discount on that? I have to say, I do agree with the philosophy of the government that the numbers should be on a break-even basis as best as they can estimate. $16 per year does not seem too —
Mr. MacKenzie: Please do not misunderstand. We are not being critical of it. There are misconceptions about snowbirds. A lot of people think snowbirds are wealthy and go to Boca Raton.
Senator D. Smith: Some are and some are not.
Mr. MacKenzie: Exactly, but we are always conscious of cost. We think this is a really good proposal, and we are not displeased at that price point.
Senator D. Smith: I know some people are wondering about the 10-year one, but I personally am open-minded on it. Obviously it should be at more of an incentive rate than the five-year one to encourage people to go that route.
Mr. Slack: In response to that as well, our members will be quite pleased with the price as quoted. As I said in my remarks, if Passport Canada is going to operate on a break-even basis, we feel that we have to keep in line senior and adult passport being the same price, and our membership is not going to be against that at all.
Senator De Bané: Mr. MacKenzie, tell me about your secretariat. Are you full time?
Mr. MacKenzie: Yes, I am the executive director, full time.
Senator De Bané: Do you have other assistants in the secretariat?
Mr. MacKenzie: We have four full time and one part time. It is a small staff.
Senator De Bané: How much does it cost to be a member of the Snowbirds?
Mr. MacKenzie: It is $25 per year for a household of two. If you live with someone, it is only $12.50.
Senator De Bané: What are the services you offer?
Mr. MacKenzie: We are primarily an advocacy organization. We do a lot of advocating on behalf of Canadian travellers, particularly in health care related items. When you leave Canada, if something were to happen to you, particularly in the United States, the costs can be quite onerous. There are a lot of issues around provincial reimbursement rates and access to sufficient quantities of prescription medication when you go down south. We do a lot of work in the United States. We have a bill before the United States Congress, both houses, called the Retiree Visa for Canadians, so they can spend a little bit more time down there.
Senator De Bané: I assume that, on your website, you give them a lot of information?
Mr. MacKenzie: That is the other point. We are an advocacy organization, but we are an information-based organization as well. We update them regularly on the things they need to know about travelling to the United States, everything from how do you bring your car back across the border to what are the things to keep in mind when you are crossing the border these days, so it is a lot of information.
Senator De Bané: When I asked the officer in charge of administration and finance at Passport Canada if it costs more to produce a ten-year passport than a five, he said no. Essentially they press "5" instead of "10" on the keyboard, and that is it. It is exactly the same process. It does not cost more. My conclusion is that they are charging what the market will bear, because it is the same cost to produce one or the other, the same investigation, the same everything. Do you find it normal that they say, "Well, we are giving them 10 years, so we have to charge more," even if it costs exactly the same?
Mr. MacKenzie: I would not be in a position to comment on that. We are just happy that they are finally moving to 10 years. We are not suggesting that it is perfect and everything we want, but we are generally very supportive of the proposal.
Senator Wallin: To follow up on an earlier question, I want to make sure that you do not have any concern on behalf of the senior members of your organization about committing to a ten-year passport versus a five, like not buying green bananas?
Mr. Slack: None whatsoever.
Senator Wallin: Thank you, done.
Senator Raine: It is really good to hear that your organization is supportive of this change, because I think we all feel that it is timely to move to a new electronic passport system. Since you are so supportive, I am curious to know the burning issues in your organization. Being as you are here today, you might want to talk to us about that.
Mr. MacKenzie: Right now, probably the number one issue is that we have a bill before the United States Congress, a bipartisan bill sponsored by Senator Chuck Schumer from New York and Senator Marco Rubio from Florida, who do not usually sponsor bills together, and it is called a Canadian Retiree Visa. Many of our members have trouble, once they go down for five or six months, going back to United States in the summer for a week to visit family or go to a wedding, because in the United States, most Canadians are only allowed to spend six months out of every twelve months down in the United States. For snowbirds who tend to spend five and a half months, crossing the border in the summer can be a bit of challenge sometimes. This, if passed, would extend that by 60 days.
We are always concerned about provincial reimbursement rates. There is a vast disparity across the country. For example, in Prince Edward Island, if something happens to you and you are injured in the United States, they will reimburse you up to a maximum of $1,155 as day for your health care expenses. In British Columbia, currently that rate is $75 a day. There is a huge disparity across Canada in terms of reimbursement rates.
Different provinces have different policies when it comes to prescription drug medication for seniors on drug plans. It is difficult to get a 180-day supply of prescription medication if you go to Florida, for instance, up front. You have to have it shipped down, and then you are dealing with U.S. Customs. With things like that, if you are someone with a heart condition or something like that, that does not make your vacation a whole lot of fun. We try to extend the limits on those issues.
There is also a great disparity in the amount of time Canadians are allowed out of province before losing their health care. In Ontario, it is seven months. In Newfoundland, it is eight months. In Quebec, it is six months, but they do not count any trips of 21 days or less. You can go away for six months, come back to Quebec and go anywhere you want to for three weeks and come back. You never have to worry about re-qualifying for your health care.
There are many issues we are trying to work on with governments. Those are the big ones right now.
Senator Robichaud: Most of the questions were answered and answered well. In French, is the name of your association the "Association des ortolans"?
Mr. MacKenzie: We just go with "Snowbirds."
Senator Robichaud: Do you operate on a cost recovery basis?
Mr. MacKenzie: Yes. We are the ultimate non-profit. We survive on the dues of our members and a few agreements that we have with partners, much like Carp does, for instance. We are non-profit.
Senator Robichaud: You survive on $1.75 million a year, collecting $25 per member?
Mr. MacKenzie: We do have agreements. We have an agreement with Medipac Travel Insurance where they give us a percentage of the insurance policies they sell. You do not have to buy an insurance policy from Medipac.
With 70,000 members, $1 million and five staff does not go as far you might think. It runs out relatively quickly.
Senator Robichaud: It is 1.75 million.
Mr. MacKenzie: We do a lot of work for our members. We have a magazine we put out four times a year. We have a radio show. We send out to our members a lot of print publications and update on a regular basis. We have four and a half staff, and we travel a lot, frankly. We travel and fly and go to the United States and various provinces. We are busy.
Senator Robichaud: I am sure you are.
Mr. Slack: One thing I wanted to add that Mr. MacKenzie did not bring up in what we do as an organization for our members is that we have a currency exchange program, where we will transfer money for our members from their Canadian bank to their bank in the United States. That has been sustaining our profits a little and giving us money to work with. It has been a very great program, and it is growing all the time. Members are taking advantage of that. That is one of the types of programs that we offer.
Senator Mahovlich: What do you consider an elderly person?
Mr. MacKenzie: Sixty-five plus, but even for us it is challenging. The age of our members is rapidly declining. With the advent of the Internet and technology, we now have members who are 55 and they are working. They do not go away for six months, but might go for two and a half; they telecommute. Demographically, our members who once were 75 plus are now 55 plus. They are not all seniors.
Mr. Slack: We do shows across the Sunbelt states in the U.S. as well as across Canada. In the last two or three years it has been amazing to see the number of younger people that are coming out to these events, information meetings and entertainment, and joining the organization. As Mr. MacKenzie says, they may only be staying for two or three months at a time but they are coming on board with us.
Mr. MacKenzie: One thing we are noticing is that a lot of the issues that affect snowbirds — particularly around health care — affect 35 year-olds who are taking their kids to Disneyland just as much. A lot of younger people do not realize they need travel insurance. They do not understand about provincial reimbursement rates and things of that nature. Once they do —
Senator Mahovlich: The elderly are more susceptible to medical problems. I have relatives who had to stop going because they had a heart condition or something.
Mr. MacKenzie: For sure. It is hard to get insurance. If we could get the reimbursement rates bumped up provincially, we could get a little break on the premiums. That is one of the things we try and do.
Senator Mahovlich: I am getting to the point where I may join the snowbirds.
Mr. MacKenzie: Twenty-five dollars, senator.
The Chair: Cost recovery. Thank you.
Senator Johnson: I do not have a clue how many snowbirds there are.
Mr. Slack: We have 70,000 members but there are a lot more snowbirds than that.
Senator Johnson: You are just dealing with the United States, right?
Mr. MacKenzie: Primarily. That is the reality of the situation right now. Demographically, we think that we will see people going other places. Right now, 70 per cent go to Florida, 15 to 20 per cent go to Arizona, and Texas and California are fighting it out for the other 10 per cent.
Senator Johnson: As people join who are younger — at 55 — and want to go to different locales, how would you deal with that in the future?
Mr. MacKenzie: As an organization, we start tracking what those regulations are in the countries where we see people going.
Senator Johnson: Are you prepared to do that?
Mr. MacKenzie: Yes.
Senator Johnson: Have you done it yet?
Mr. MacKenzie: We expect the next big hit will be coming in the next 5 to 7 years. However, right now the United States is by far the number one destination.
Senator Johnson: You will need more staff and a bigger budget.
Mr. Slack: We do have a good link with Foreign Affairs and consular services with travel advisories and things like that, especially to Mexico. We have a number of members in Mexico and people are also going to Spain and Portugal. We have members there. A lot of the travel information is the same no matter where you go in the world.
Senator Johnson: That is why I am curious about it. There will be other locations they will want to go to and dealing with health and other issues, they will need an umbrella organization. Good luck with your expansion.
Mr. Slack: Thank you.
The Chair: I take it that the radio show, magazines and your direct contact is really to give information and to equip visitors.
Mr. Slack: Correct.
The Chair: Do you deal with the passport and that, in fact, the passport does not belong to us? If you read the inside cover it is the property of Canada, and they have a responsibility to ensure that they deal with their passports responsibly, and how to go about the loss. I speak of my previous job where it was very difficult to explain to people that they are responsible for that passport. It has consequences to Canadians and Canada and it should not have been sticking out of a back pocket while they are walking where anyone could lift it. There is a time delay and a cost delay to Canadians when we have to replace passports.
Mr. Slack: Yes.
The Chair: There could be security implications. Are you dealing with those kinds of issues?
Mr. MacKenzie: We have been for years. As Mr. Slack said in his opening remarks, we have been trying to educate our members on the importance of carrying a passport and the responsibilities that go along with that for a number of years. On a practical level, most of our members are seniors and they want convenience. If you lose your passport, it opens up a whole can of worms you do not want to get involved with, in terms of red tape and things like that. We urge caution and have for years.
The Chair: Good.
Senator Fortin-Duplessis: My question follows the one that our chair asked. Some witnesses who appeared before the committee advised Passport Canada to have people whose passports are lost or stolen pay extra, rather than spread the replacement cost among all applicants. What is your opinion on this matter?
Mr. MacKenzie: Generally, we would be supportive of that. Our primary goal in this process is to keep the price — particularly for seniors, as well as your average Canadian traveller — as low as possible. We understand there are economic realities here. We would be more supportive of spreading that economic burden, the financial burden to people who have lost a passport or are requesting expedited service. The answer is, the money has to come from somewhere and that is where we would like to see it come from.
Senator Fortin-Duplessis: Do you have any comment, Mr. Slack?
Mr. Slack: No, I agree with Mr. MacKenzie.
Senator Raine: I am curious about you finding more Canadians now going down for extended periods at a younger age. Many of them are buying real estate. There is no doubt that the real estate market in the Sunbelt has been positively impacted by investment from Canada. Perhaps in your negotiations for an extended snowbird visa you might want to point that out. I do not know if you have done any research on that. Do you know how many of your members own property in the U.S. and are you aware of the impact it is having?
Mr. MacKenzie: It is about a 65-35 split. The vast majority of them right now spend their money in Florida, either rent or own. Canadians spent over $3 billion last year in Florida. Again, about two thirds own and a third rent. However, over the last two or three years a lot of Canadians — even the ones who own — are kicking the tires and trying to upgrade because of the great real estate deals.
It is refreshing when you talk to members of the U.S. Congress, particularly in states like Florida, Texas and California. They know better than we do about the economic impact of snowbirds. When we go down there a lot of times, provincially, we are looking for things like reimbursement rates. We have a trickier time provincially, but down there they roll out the red carpet. They know that we come down, obey the law and spend money and they are supportive of that.
The Chair: Thank you. I have exhausted the list. That was a high point on the answer. It has been very helpful, not only on our study on the fees, but also in learning a little about the travels of Canadians and your organization. I appreciate that you made the effort to come today.
Senators, we will be continuing our study by virtue of dealing with the issue next week. We have asked for some written material on some of the points and I expect that we will get that in the next several days. With no further questions, I thank our panel for coming and this meeting is adjourned.
(The committee adjourned.)