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CME Policy Brief – Repeal Of The Industrial Exception

Submitted by Ian Howcroft, Vice President, Canadian Manufacturers & Exporters (CME) Ontario
Overview: On January 25th, 2013, the Attorney General of Ontario announced that effective March 1, 2013, those responsible for professional engineering work in relation to production machinery or equipment must be licensed by Professional Engineers Ontario (PEO). CME engaged the Attorney General, the MEDTE, the Premier’s office and key industry stakeholders in opposition to the change. The AG has subsequently extended the timeline for implementation from March 1, 2013 to September 1, 2013.

CME is coordinating a response calling for a full Regulatory Impact Analysis and, subject to verification of the costs and lack of benefit, a return to the status quo with respect to the industrial exception.

Background:
Currently there exists an “Industrial Exception” which allows non-P.Eng personnel to conduct work on equipment that would otherwise require a P.Eng designation (e.g. design work). The Government of Ontario approved a change to the Professional Engineers Act that would remove the “industrial exception” on March 1, 2013. Ontario had also approved a transition period of one year for companies that file a transition plan with the PEO by March 1, 2013. Employers that file the transition plan will have one year to meet the requirements.

With the repeal of section 12(3)(a) of the Professional Engineers Act, individuals must now be licensed by PEO if they do any act within the practice of professional engineering on machinery or equipment used to produce products for their employer in their employer’s facility. In 1984, when the exception was enacted, requirements existed for Ontario’s Ministry of Labour engineers to approve predevelopment reviews of proposed industrial processes and associated equipment. This requirement was replaced by Regulation 851 under the Occupational Health and Safety Act, which introduced the current requirement for industry to have professional engineers approve Pre-Start Health and Safety Reviews (PSRs) prior to the start-up of newly installed or altered production equipment or machinery. If a PSR finds deficiencies in the setup of equipment or machinery, the equipment or machinery cannot be used until the necessary changes are made and a PSR approved.

PEO will waive fees for new-comers to Canada and new grads.

CME Member Issues:
General: There is a great deal of uncertainty as to what constitutes “professional engineering” work/activities within the Act. This uncertainty is leading companies to adopt a conservative interpretation of the potential impact of the change. Therefore, companies will have to conduct an assessment of all process activities that are currently conducted by non-P.Eng personnel and determine whether they will now need to be conducted by P.Eng certified professionals. Members are also very concerned that the March 1st deadline is not feasible and will put companies into non-compliance. The cumulative impact of this and other regulations companies are facing presents an unfriendly image of Ontario as a place to invest
Potential Cost Implications For Manufacturers: Licensing fees, higher wage rates for P.Eng, increased insurance premiums, significant process realignment (e.g. changes to accommodate P.Eng availability), lack of qualified personnel, lower quality (P. Eng not necessarily most qualified person), recruiting costs, etc. The costs could be hundreds of thousands of dollars for a large manufacturer. Note: A small number of members have been in favour of the repeal on the basis that it would address low-skilled/unqualified people doing engineering work.

CME Actions to Date: CME has submitted a letter to the Attorney General of Ontario calling for a halt to the March 1st deadline until a full regulatory impact analysis can be conducted; CME has also worked with the Premier’s Office, the Ministry of Economic Development, Trade & Employment and the Open for Business Secretariat and engaged other industry stakeholders to coordinate a broader response. CME member/industry stakeholder meeting held on Tuesday, March 5th to provide update and determine course of action.

Government Response: The AG issued a statement postponing the implementation of the Repeal of the Industrial Exception from March 1st to September 1, 2013.

Next Steps: CME is following up with the AG/Premier’s office/MEDTE on impacts and PEO requesting clarity as to what constitutes “Engineering Work” under the Act.

For more information on the Canadian Manufactures & Exporters (CME) Ontario, visit www.cme-mec.ca.