Interest on Debts for Services Rendered by the Royal Canadian Mounted Police Remission Order: SI/2023-7

Canada Gazette, Part II, Volume 157, Number 8

Registration
SI/2023-7 April 12, 2023

FINANCIAL ADMINISTRATION ACT

Interest on Debts for Services Rendered by the Royal Canadian Mounted Police Remission Order

P.C. 2023-289 March 27, 2023

Her Excellency the Governor General in Council, considering that it is in the public interest to do so, on the recommendation of the Treasury Board and the Minister of Public Safety and Emergency Preparedness, under subsection 23(2.1)footnote a of the Financial Administration Actfootnote b, remits the interest paid or payable on debt owed by a municipality for the retroactive compensation increases for the period beginning on April 1, 2017 and ending on March 31, 2021, under its Municipal Police Service Agreement.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

The Governor in Council, on the recommendation of the Treasury Board and the Minister of Public Safety and Emergency Preparedness, under subsection 23(2.1) of the Financial Administration Act (FAA), makes the Interest on Debts for Services Rendered by the Royal Canadian Mounted Police Remission Order (the Remission Order).

Objective

The objective of the Remission Order is to remit all relevant interest payable by municipalities that contract policing services for the Royal Canadian Mounted Police (RCMP), related to four years of retroactive cost increases (back pay) that resulted from the ratification of the National Police Federation’s (NPF) first ever collective bargaining agreement for Regular Members (RMs) and Reservists. It is in the public interest to remit interest on debt for RCMP policing services to ensure equitable and fair treatment of all contract jurisdictions.

Background

The RCMP provides front-line policing services to all provinces and territories except in Ontario and Quebec, and to over 150 municipalities and more than 600 Indigenous communities. They also provide peace officer services at three international airports (Vancouver, Edmonton, and Winnipeg). Provinces and territories have jurisdiction over the administration of justice, including policing matters, and establish their level of policing, budget and policing priorities. RCMP police services in contract jurisdictions are administered through police agreements, which are cost-shared contracts between each jurisdiction and the federal government.

Public Safety Canada (PSC) is responsible for the administration of the contracts. The RCMP is the service delivery agency and has responsibility for the financial administration of the contracts. The police agreements outline the duties and responsibilities of the RCMP in financial, operational and administrative areas, and the requirement for jurisdictions to pay operating and maintenance costs for police services, as well as costs related to pay and benefits inclusive of retroactive pay increases.

On August 6, 2021, the Government of Canada signed the first ever collective agreement with the NPF, the bargaining agent for RCMP members, regarding RMs and Reservists covering the period April 1, 2017, to March 31, 2023. Excluded were senior ranking RCMP Commissioned Officers (i.e. rank of Inspector and above). This agreement followed legislation passed in 2017 allowing RCMP RMs and Reservists to unionize and bargain collectively for the first time. Included in this agreement was retroactive salary increases of nearly 15.2% over four years (2017–2018 to 2020–2021), resulting in a total amount of retroactive costs owed by all jurisdictions of $448.1 million.

Since the conclusion of the collective bargaining process, contract jurisdictions asked the federal government to consider flexible payment options related to the repayment of prior year retroactive salary increase costs. In response, the federal government will provide a flexible repayment schedule of up to two years for each contract jurisdiction beyond the existing timelines in the policing agreements (i.e. beyond the 45 days as stipulated in the Police Service Agreements and 60 days stipulated in the First Nations and Inuit Policing Program [FNIPP] agreements). This measure recognizes that some jurisdictions may require additional time to repay the total amount owing due to financial hardships, such as costs incurred from the COVID-19 pandemic.

Any extended repayment schedule will invoke interest accrual on debt under the FAA, further compounding the debt owed by contract jurisdictions. Under the FAA, provinces and territories are not subject to paying interest on debts owed to the Crown. Where policing agreements are entered into with a provincial and territorial government for the provision of police services, those entities are exempt from paying interest on any debts owed to the Crown. This includes airports, Indigenous communities and municipalities within British Columbia where the federal government contracts with the province, which in turn contracts directly with municipalities.

While the policing agreements are silent on interest, the federal government will treat all jurisdictions fairly and equitably with respect to this unprecedented situation. Remitting interest is in the public interest as it ensures that all municipalities are treated the same way as provinces and territories. Therefore, pursuant to subsection 23(2.1) of the FAA, an order in council is required to remit all relevant interest payable related to the debt owed under the municipal police service agreements.

Implications

The Remission Order will remit all relevant interest payable on debt owed by municipalities for the retroactive compensation increase for the period beginning on April 1, 2017, and ending on March 31, 2021, under their Municipal Police Service Agreement. Given the unique structure of the policing agreement with British Columbia, all municipalities under this policing agreement are exempt from interest on debt owing. Remitting interest for all municipalities increases fairness among all RCMP contract policing jurisdictions since provinces and territories do not have to pay interest under the FAA.

Gender-based analysis plus (GBA+)

PSC and RCMP led engagement sessions with provinces, territories and municipalities, between March and June 2022, where many municipalities across Canada communicated that they struggle to secure the financial capacity necessary to absorb the rapidly growing cost of local policing, compounded by challenges such as rising inflation and gas prices, mental health and opioid crises, and rebounding from the COVID-19 pandemic. Remitting any interest payable, where applicable, to municipalities will indirectly have a positive impact on individuals in those jurisdictions, such as women, men, and gender diverse people who will benefit from protection against funds being diverted away from other local financial pressures to pay interest on retroactive costs.

Consultation

Prior to and during the first ever collective bargaining negotiations, led by the NPF and the Treasury Board Secretariat (TBS), PSC supported communication and engagement with contract jurisdictions through the Assistant-Deputy-Minister-level Contract Management Committee (CMC), which engages with contract jurisdictions regularly to ensure that policing remains current and responsive to evolving requirements and innovative approaches within the terms of the contract. To the extent possible, due to the confidential negotiation process, the CMC was utilized to share information with all members and answer questions as it related to the process. TBS also shared information directly and kept members updated through regular CMC meetings and a special group of CMC representatives that met with the federal government to receive negotiation updates and to share the information among other contract jurisdictions including municipalities.

In January 2022, government officials from PSC and the RCMP held an ad hoc meeting of CMC with its provincial, territorial and municipal associate members to provide an update and discuss work to examine contract jurisdictions’ request on payment flexibility. In February and March 2022, PSC wrote to each contract jurisdiction to provide individualized cost estimate ranges for retroactive amounts owed, as well as the RCMP methodology for calculating estimated costs. These letters also invited interested contract jurisdictions to meetings with PSC and RCMP officials to discuss their individual situations, needs and concerns. In total, between March and June 2022, a total of 15 meetings were held with over 100 contract jurisdictions, including CMC municipal association representatives. In total, more than 180 representatives from provincial, territorial and municipal governments and municipal associations were engaged in these meetings. Additionally, PSC has communicated with the Federation of Canadian Municipalities to keep them informed of the Government’s analysis to inform decision-making on this matter.

PSC will continue to engage contract jurisdictions through the CMC and by issuing letters to all contract jurisdictions to inform them of the decision. The RCMP will then invoice contract partners. PSC will contact each contract jurisdiction to discuss repayment flexibility, if required, up to a maximum of two years.

The Privy Council Office, the Treasury Board Secretariat, the Department of Finance, the Department of Justice and the Royal Canadian Mounted Police were consulted on the Remission Order.

Contact

Julie Thompson
Director General
Policing Policy Directorate
Crime Prevention Branch
Public Safety Canada
296 Laurier Avenue West
Ottawa, Ontario
K1A 0P8
Telephone: 613‑297‑3719
Email: Julie.Thompson@ps-sp.gc.ca