The Liberal government is setting out new rules on payment and protections for sperm or egg donations and on carrying someone else's baby — but a Liberal MP says it's time to overhaul Canada's outdated, ineffective laws.

Health Minister Ginette Petitpas Taylor announced today the launch of consultations on proposed new regulations on assisted human reproduction that aim to protect those who use (or are born from) donated sperm or eggs, or use a surrogate mother.

The current Canadian law, which came into force in 2004, prohibits paying a surrogate mother for her services — but it does allow reimbursement for certain medical and maternity costs when the surrogate mother is performing the service for altruistic reasons.

"The g​overnment of Canada is taking necessary steps to help Canadians who use reproductive technologies to do so safely and with peace of mind," Petitpas Taylor said in a statement. "New proposed regulations will help protect the health and safety of women and children across Canada.

"They will also offer couples dealing with infertility, single people, same-sex couples and other members of the LGBTQ2 community flexibility in building their families."

The new regulations:

Establish a health and safety framework for third-party donor sperm and eggs.

Identify categories of expenditures that can be legally reimbursed to donors and surrogates

Make minor updates to existing consent regulations, including the introduction of a record retention requirement.

Liberal MP Anthony Housefather said the new regulations don't go far enough. He has tabled a private member's bill to decriminalize payments for surrogate moms, as 40 U.S. states have already done.

Anthony Housefather joined Power & Politics Friday to discuss his private members bill that proposes changes to the Canada's surrogacy laws. 8:06

The ban leaves potential surrogates and parents worried about breaking the law, he said. Many prospective parents, surrogates, legal experts and fertility experts believe it should be decriminalized.

Revamp the law

"We really need to revamp the law and allow the provinces to properly regulate and decriminalize this," Housefather said.

Housefather, who chairs the House of Commons justice committee, said same-sex couples, single mothers and women choosing to have children later in life would all benefit from a legal change.

While there is no change planned to the current prohibition on charging a fee for surrogacy service, the new regulations clarify the sorts of expenses that can be reimbursed to a surrogate mother.

A person may reimburse a surrogate mother for lost wages, for example, if she did not work for a reason certified by a qualified medical practitioner.

Other eligible expenses include:

Costs for transportation, parking, meals and accommodation

Costs for care of dependants

Costs for counselling and legal services

Costs for certain drugs, devices and maternity clothes

Expenses related to the delivery, health, disability or life insurance coverage.

The proposed regulations also spell out reimbursement categories for sperm and egg donors, and reduce the current lifetime ban on male donors who have had sex with other men to a period of six months.

One expert is praising the changes, saying Health Canada is doing the right thing by spelling out the rules.

"I think they staying true to the principle of the legislation, which is the non-commercialization of human reproduction," said Françoise Baylis, the Canada Research Chair in Bioethics at Dalhousie University.

Trudeau: surrogacy is an 'extremely important issue'

In April, Prime Minister Justin Trudeau said it's time for Canadian society to wrestle with the controversial issue of paying women to carry other people's babies.

He called surrogacy an "extremely important issue" that affects many prospective parents, including same-sex and infertile couples. He said he expects the debate to draw extreme opinions and emotions.

The issue has been contentious in the past, even within feminist circles. Proponents of paid surrogacy say the ban denies women the right to do what they want with their bodies. Opponents say it amounts to commercializing a woman's body.

"Those are people who would be shocked if anybody dared to say a woman wouldn't have the right to choose to have an abortion, but they want the state to stop a woman from choosing to be a surrogate or a donor," Housefather said.

"It's very draconian for the state to impose its will like that, and I think in Canada we're already way past that."

The number of reported surrogates in Canada has increased in recent years, from 285 in 2010 to about 700 last year.

A health official said there is only one known case of a criminal conviction for surrogacy, when a woman providing the service was given a fine.