Departmental Remissions Policy for Service Fees

1. Effective date

This policy was approved by the Chief Financial Officer of Environment and Climate Change Canada (ECCC) and is effective for services provided on or after April 1st, 2021.

2. Application and scope

2.1. A remission is the reimbursement to a fee-payer of a fee or portion of a fee paid in respect of a service, use of facility, or right or privilege for which the department determines the performance standard was not met.

2.2. A key element of the Service Fees Act (SFA) relates to remissions, which helps keep programs accountable for their performance (or service) standards. To this end, this policy provides direction to programs on granting remissions required under section 7 of the Act, including implementing the associated requirements under subsection 4.2.4 of the Directive on Charging and Special Financial Authorities.

2.3. Fees referred to within section 2 of the SFA, under the definition of fee - paragraphs (a) to (c), are subject to the requirements listed under section 4 (performance standards) through section 7 (remissions) of the SFA.

2.4. This policy applies:

• To all persons at ECCC with a delegated financial authority, or a functional/operational responsibility related to fees in which the government has passed legislation or regulations directed at those participating in the same regulated industry or activity;
• To all program areas within ECCC that charge fees for which section 7 of the SFA will apply as set out under sections 3(1), 3(2);
• To fee-payers, being reimbursed a portion of a fee paid in respect of a service, use of facility, or right or privilege for which the department determines the performance standard was not met.

2.5. This policy does not apply:

• To fees that are exempt from section 7 the SFA, pursuant to both section 3 (e.g. fees set by contract, internal fees charged to federal entities listed in Schedules I, I.1, and II of the Financial Administration Act, fees attributed to Access to Information or the Privacy Act, fees beyond the control of the department, fees related to the provision of a product, fees incurred in relation to a regulatory scheme), and section 22 of the SFA (low-materiality fees);
• To reimbursements which are not considered remissions under section 7 of the SFA, i.e., not related to a performance standard being met. Examples include payments made in excess of what is due (e.g. two permits are purchased on-line instead of one), deposits/advance payments (e.g. the withdrawal of a permit submission), and reimbursements due to administrative errors.

3. Purpose

3.1. This policy is intended to provide clarification and direction to department officials responsible for creating performance standards for fees, including the portion of the fee that is to be remitted in cases where that standard has not been met. It will also serve to provide a fair and consistent departmental approach in the management of remissions that is in accordance with Treasury Board of Canada Secretariat policies and directives regarding:

• The authority under which a remission may be granted;
• Considerations when programs are setting a performance standard and attributing an appropriate remission; and
• Establishing an effective and rigorous process to document and action remissions.

4. Authorities

4.1. Fees that are subject to remissions under this policy fall under the authority of Section 7 of the SFA.

4.2. The following acts, directives and guides provide additional guidance to departments related to remissions:

• TBS Directive on Charging and Special Financial Authorities (Section 4.2.4);
• Low-materiality Fees Regulations;
• ECCC’s Delegation of Spending and Financial Signing Authorities;
• Directive on Accounting Standards;
• Financial Information Strategy Accounting Manual.

5. Definitions

• Fee: For purposes of this policy, an amount (called a fee, charge, levy or by any other name) that, in relation to a federal entity, is fixed by the Governor in Council, the Treasury Board, a minister or the federal entity under a power conferred by an Act of Parliament or a capacity to contract and is payable for:
  1. The provision of a service;
  2. The provision of the use of a facility;
  3. The conferral, by means of a licence, permit or other authorization, of a right or privilege.
• Fiscal year:  The period beginning on April 1 in one year and ending on March 31 in the next year. 
• Low-materiality Fee: For the purpose of subsection 22(1) of the SFA, the following fees are considered to be low-materiality fees (not subject to performance standards nor a remission):
  1. Any fee that is less than $51;
  2. Any fee that is $51 or more but less than $151 if:
     1. The three most recent reports tabled in respect of the fee before the first day of the current fiscal year set out no more than $500,000 of annual revenue received from that fee,
     2. The fee has been adjusted since the tabling of the most recent report in respect of it and the three most recent reports tabled in respect of it set out no more than $500,000 of annual revenue received from that fee,
     3. There have not been three reports in respect of the fee and the fee has, at no time since the day on which these Regulations came into force, been more than $151 or referred to in Schedule 2, or
     4. The fee was previously considered a low- materiality fee in accordance with paragraph (a), subparagraphs (i) to (iii) or paragraph (c) and has not since ceased to be a low-materiality fee in accordance with section 3; and
  3. The fees referred to in Schedule 1 of the Low-materiality Fees Regulations.
• Exceptions:
  1. Paragraphs (a) and (b) above do not apply to any fee the amount of which is determined by a formula;
  2. Fees referred to in Schedule 2 (Fees that are not Considered Low-materiality Fees) of the Low-materiality Fees Regulations.
• Privilege: Privilege is defined as a prerogative, entitlement, due, advantage or benefit that is conditional on a factor or series of factors.
• Remissions: The reimbursement to a fee-payer of a fee or portion of a fee paid in respect of a service, use of facility, or right or privilege for which the department determines the performance standard was not met.
• Responsible authority: Departmental employee responsible, with respect to a fee, to ensure that a performance standard is established in respect of the fee, in accordance with Treasury Board policies or directives, if any.
• Right: A Right is defined as an authority, power or permission that is not revocable or amendable except under extraordinary circumstances using extraordinary measures.
• Service Standards Vs Performance Standards:
• As defined in Appendix B in the Directive on Charging and Special Financial Authorities, a “service standard” is a public commitment to provide a service, product, or conferral of rights and privileges, in a way that is measurable and relevant to the fee-payer under normal circumstances.
• A “performance standard” referred to in the SFA is the equivalent of a service standard. Therefore, for consistency purposes, this policy will reference the term “performance standard” throughout.

6. Policy statement

6.1. Policy Framework

This policy is framed around the requirements as set out within Section 7 of the SFA, as well as the TBS Directive on Charging and Special Financial Authorities (Section 4.2.4) which requires that departments establish a remissions policy and procedures for granting remissions to fee-payers.

6.2. Setting Performance Standards

The Department must set performance standards in respect to the fees it charges in accordance with the SFA. The remissions policy describes the circumstances under which a portion of the fee paid should be remitted to the fee payer in cases where the performance standard has not been met.

Performance standards should be both reasonable and achievable. A performance standard that appears overly burdensome is likely too strict and should be adjusted to fit the program’s operational reality. As such, programs should avoid creating situations where significant analysis is required to determine whether performance standard was met and, where it is not met, that an appropriate remission should be provided to the fee-payer.

6.3. Setting Remissions

Each Program will set specific remissions based on factors that may include consideration of the following: the impact of the missed performance standard on the fee payer and the proportion by which the standard is not met. In keeping with subsection 7 (1) of the SFA, it should be noted that where a performance standard is not met and a remission is due, the responsible authority will remit, before July 1 of the following fiscal year, the portion of the fee that the responsible authority considers appropriate to the fee-payer in question.

Each program in ECCC with fees subject to the SFA remission requirements will develop a program-specific remissions approach. Program-specific remissions approach documents will describe applicable services, performance standards and services delivered, set out applicable remission rates for fees and describe relevant compliance monitoring and reporting processes.

7. Approval

When it has been identified that a remission is appropriate, program officials are to ensure that prior to the issuance of the remission, the request is approved by the appropriate authority. ECCC’s Delegation of Spending and Financial Signing Authorities sets out and describes the appropriate level of approval required based on the dollar value prior to payment of the remissions.

8. Requirements

The following requirements apply to the development of all program specific remission approaches:

8.1. Programs will establish Performance Standards

Set the standard at the individual level (not aggregate level) for all fee-payers

Each program with a fee subject to this departmental policy must be able to measure its performance with respect to each fee payer, and provide a remission to the fee payer when the program does not meet its publically available performance standard.

Note that programs are not permitted to set a performance standard for a fee in such a way that a remission would only be issued when the performance standard was met for less than a certain percentage of all instances (e.g. programs cannot state that no remission will be issued when the standard has been met for a minimum of 80% of all fee-payers).

Ensure the performance standard is realistic

Remissions should be the exception rather than the rule. If a program is issuing many remissions in a fiscal year for a specific fee, it could be an indication that the performance standard for the fee is not realistic. As such, programs are to test the feasibility of a remission including the proportion by which the standard is not met.

Amending a performance standard

Departments must hold consultations before amending a service standard. Performance standards that existed prior to June 22, 2017, are exempt. However it is recommended that programs which are considering amending a performance standard that is subject to such an exemption, should consult with interested persons in advance.

8.2. Programs will determine the applicable Remission Amount

Determining whether or not the Performance Standard has been met

Each program will describe the start and end of a performance standard relevant to its fees as well as the service being provided for said fee. For example, section 12.2 provides a link to the remissions approach for the Disposal at Sea Program that includes its performance standards. One of its standards involves assessing a permit application and making a permit decision within 90 days, in exchange for the payer paying an application fee. The program notifies the fee payer when it has received their complete permit application and application fee, and tracks the date on which the notice is sent and the date that the permit decision is made. Where the time between the dates is less or equal to 90 calendar days, the standard is considered to have been met.

Fee-payer contributing to delay and other factors beyond the control of the department

In considering whether a performance standard has been met, each program will track and consider any delays resulting from the fee-payer’s actions or factors beyond the program’s control. Such delays should not count against the standard. For instance, in the above example, if a severe storm disrupts telecommunications for 2 days, these 2 days would not be counted as part of the 90 days allotted to the program to reach a decision.

Similarly, the New Substances Program has an established 60 day performance standard to make an assessment decision for a schedule 5 notification as per the New Substances Notification Regulations (Chemicals and Polymers). The timeline for the standard starts once all administrative information, fees and information prescribed by the notified schedule of the regulation is provided. If information is determined to be missing at any point during the assessment period, the notifier will be informed and the timeline will be restarted once the information is has been received.

Calculating the time taken to meet the performance standard

The time period begins when the program has all that it needs to initiate the provision of the service. Discounting any delays caused by a fee-payer or circumstances beyond the program’s control that prevent the delivery of the service, the standard is considered to have been met if the program does not take any longer to provide the service than the performance standard allows (as a result, no remission would be owed).

Considering the potential adverse impacts on the fee-payer

The impact on a fee-payer of failing to meet a performance standard may be small or quite significant and may be taken into account by the program in determining an appropriate remission.

While remissions must be issued on a case by case basis, the analysis that lays out the conditions for, and the amount of, a remission can be based on a general analysis. For example, for Disposal at Sea (refer to the link within section 12), the program has determined that failure to meet the performance standard of making a decision to issue a permit within 90 days of the applicant being advised that their application is complete could have a medium impact on fee payers by delaying their ability to complete their project. Having set such a policy in place, the program will now assume the same level of impact every time the same performance standard is missed. Consequently, it will set a fixed remission rate based on a medium impact for all cases so the fee payer can readily determine what remission to expect.

Considering the appropriate portion of the performance standard not met

When a program misses a performance standard, it must grant a remission; even if it is minimal in nature and regardless of the frequency with which the program misses the standard. For example, programs that meet their performancestandard 95% of the time, will issue a remission 5% of the time.

Programs may also consider the degree that a performance standard has been missed. For example, a program could consider providing a larger remission when it misses a standard by multiple days versus when it misses a standard by one day. The Disposal at Sea Program Remissions approach (see section 12) provides an example indicating that exceeding the 90 day standard will result in a remission of 15% of the fee paid. However, if the standard is missed by more than 45 days, then a 25% remission would be due to the fee payer. The amount to remit and the number of days by which the performance standard has been missed will be determined by each program and could be different for each fee.

Note that programs are not allowed to adopt a 0% remission policy, which would violate the SFA. On the other hand, programs may adopt a 100% remission policy, however before doing so, should consider their costs and whether any part of the services were actually delivered.

8.3. Programs will grant remissions when applicable

After setting the performance standard, and determining the remission amount, programs are to be mindful of the following additional requirements:

Approval of Remission requests

Per ECCC’s Delegation of Spending and Financial Signing Authorities, requests for remissions are recommended by level 6 Program Managers and approved by level 5 Program Directors.

Programs are to develop a consistent approach as to how fee payer’s information will be retained when a remission is issued directly by Finance (e.g. by cheque) or by the program (e.g. by credit to the fee-payer’s credit card).

Funding for Remission requests

Programs collecting Vote Netted Revenue (VNR) are entitled to re-spend the fees they collect, and can use their VNR as a source of funds for paying out remissions. Note that programs which are not entitled to re-spend the fees they collect (e.g., where fees are directed to the Consolidated Revenue Fund), are required to establish a separate cost centre for tracking remissions issued from their regular operating budget.

Exempt Fees

Programs must not issue a remission for low dollar materiality fees or other exempt fees as listed under section 2.5 of this policy.

Form of Remission

Remissions are granted in the same form (e.g. credit card or cheque) in which the original fee was paid.

Informing Fee Payers

Programs are to contact fee payers by email or by post informing them that they are owed a remissions payment. Fee-payers do not need to apply for a remission. If a program cannot issue a remission because of circumstances beyond its control, it should retain the funds and maintain a record of its attempts and indicate that the fees were not returned in X number of cases in its annual fee report.

The Remission Amount

Applicable remissions must be based on the original fee amount paid, and not on any changes to the fee that might have occurred since the fee was paid.

Interest

Remissions issued under this policy are not subject to interest.

Processing all remissions prior to July 1 of the following fiscal year

For example, remissions that are related to fees paid in fiscal year 2021–22 must be issued prior to July 1, 2022.

When the performance of the service crosses over fiscal years

In some cases, a program may have difficulty issuing a remission by the July 1st deadline if the program has not completed the service in full. For example, a program receives an application for a permit in March 2021 (fiscal year 2020-21), however the performance standard to review the application is 90 days and the resulting service is not completed until the next fiscal year in 2021-22). In this scenario, if the performance standard is missed in fiscal year 2021-22, the amount remitted would be due by July 1st of the following fiscal year (2022-23).

8.4. Program monitoring and review

Programs will develop, approve and periodically review all fees subject to the SFA, where this includes related:

• Performance standards; and
• Remissions approaches.

Tracking and monitoring

Programs are responsible for tracking and monitoring compliance with performance standards on an ongoing basis. In addition, programs are required to provide, on an annual basis, comprehensive information about all fee transactions to CSFB for use in the preparation of the ECCC Annual Fees Report. The report is to include information as set out in section 20 of the SFA, i.e., information on new, modified or abolished fees, fees that did not generate revenue, fees for which no costs were incurred, as well as any low-materiality fees..

Fee-payer comments and complaints

Programs are to establish a process for accommodating fee-payer comments or complaints. Complaints which cannot be resolved at the program level are to be sent to the Director General Financial Management for resolution. Requests are to be routed to the following address:

Senior Director, Treasury Board Submissions, Costing and Revenues
Environment and Climate Change Canada
200, boul. Sacré-Coeur
Gatineau, Qué.
K1A 0H3

Additional requirements are identified within the roles and responsibilities listed within section 9.

9. Roles and responsibilities

The TBS Policy on Financial Management sets out the Deputy Minister’s and CFO's standards and expectations for sound financial management and control across the Department. Some of the roles and responsibilities described in this policy are further described within ECCC’s Delegation of Spending and Financial Signing Authorities. In addition, the roles and responsibilities with respect to this specific policy are as follows:

9.1. Deputy Minister/Associate Deputy Minister

• Will investigate and act when significant issues regarding policy compliance arise, and ensuring that appropriate remedial action is taken to address such issues within the department;
• Will ensure that the CFO advises the Comptroller General of Canada on a timely basis when there are difficulties in complying with this policy, its supporting instruments or other direction from the Comptroller General of Canada.

9.2. Assistant Deputy Ministers of Programs Subject to this Policy

• Will ensure compliance with this policy and any related directives, guides and procedures regarding the setting of service fees and establishment of performance standards with the goal of creating transparency and encouraging efficiency in the provision of federal services;
• Will ensure compliance with this policy and any related directives, guides and procedures related to the application of all remissions.

9.3. The Chief Financial Officer (CFO)

• Will ensure adherence to this policy across ECCC, and will review all program-specific remissions approaches to ensure alignment with this policy.
• Will approve, communicate and maintain a departmental policy on remissions and related procedures for granting remissions or delegate the approval to the DCFO, or to the DG of Financial Management Directorate, as necessary;
• Will ensure that departmental remissions are processed prior to July 1st of the next fiscal year;
• Will approve the Department’s annual fees report, prepared in accordance with section 20 of the Service Fees Act.

10. Monitoring and reporting

This policy will be reviewed at a minimum of once every five years, subject to priority ranking of all areas of risk or significance within ECCC. In addition, all departmental remissions will be reported and made public within the President of Treasury Board’s Annual Fees Report, and on the annual Departmental Results Report.

11. Inquiries

For interpretation, clarification or inquiries regarding this policy please email CEFA - Centre of Expertise for Financial Arrangements or write to:

Senior Director
Treasury Board Submissions & Costing and Grants & Contributions Management
Environment and Climate Change Canada
200, boul. Sacré-Coeur
Gatineau, Qué.
K1A 0H3

12. Program specific remissions approaches

12.1. New Substances Program Fees Remissions approach

The New Substances Program Remissions Approach

12.2. Disposal at Sea Program Remissions approach

The Disposal at Sea Program Remissions Approach