Advice to the Treasury Board (June 2024)

Regulatory excellence serves the public interest by promoting strong protections while minimizing unnecessary burdens that can limit economic opportunities (see Appendix A for visual).

Acknowledging there will always be challenges in achieving desired outcomes while minimizing regulatory burden, we believe regulatory excellence is a powerful North Star to help Canada’s regulatory system deliver more value and should be championed widely across government and beyond.

Regulatory excellence means that Canadians trust the milk in our fridge is safe to drink and that international consumers value our high-quality blueberries, meat products, lumber, pharmaceuticals, motor vehicles and other products. Regulatory excellence makes us more efficient and frees up time to be used more productively elsewhere.

For example, we heard from Nova Scotia, where the government is working with doctors to simplify paperwork and increase time to see patients. Reducing the use of “sick notes,” for example, frees up 67,000 hours annually, which is the equivalent of 201,000 patient visits. Regulatory excellence means using technology to improve service and outcomes. We heard how Kelowna is using artificial intelligence to reduce wait times for straightforward housing permit approvals from an average of 3 weeks to 24 hours and soon to be a matter of seconds, improving service to citizens and allowing staff to focus on more complex, higher-risk permits.

Change our mindset around regulation

Regulatory excellence is an asset that is core to Canadian competitiveness and the well-being of its people and communities. To support excellence, we need to equip Canada’s regulators to be world class by modernizing training, technology, and systems. We need to support a regulatory culture that is risk-informed, deliberate, accountable, and nimble.

We prioritize two key themes to address the urgent challenges facing Canada’s regulatory system. For each theme, we have provided one specific recommendation. We chose the two areas that have the most potential to deliver ongoing value to Canadians – better economic, health, safety and environmental outcomes. More detailed suggestions related to our mandate to give advice on the Cabinet Directive on Regulation (CDR), stock review, and progress on the first committee’s recommendations are found in Appendix B ^{Footnote 1}.

Digitize regulatory data and make it accessible

Canada’s regulatory system is in critical need of better measures for everything from international benchmarking to cumulative burden, service standards, and report cards on the implementation and performance of individual regulations. Without better performance measures, the system lacks accountability and is at risk of being rudderless and inefficient.

Recommendation: Better regulatory measurement should be a government-wide priority, with an early emphasis on a digitized inventory of regulatory requirements that is searchable, can be used by any department, and is accessible to Canadians, and easy to use. We recommend developing Transport Canada’s Regulatory Evaluation Platform to make it as comprehensive as possible (for example, including regulatory requirements found in legislation, regulations, forms, guidance, and policy requirements). The regulatory platform tool can identify regulatory requirements throughout a supply chain (for example, EV [electric vehicle] batteries from mining to manufacturing), search for different definitions (for example, “child” has 103 different definitions in 107 Canadian acts and regulations) and provide a clear picture of regulatory burden in Canada. ^{Footnote 2}

Benefits: An easy-to-search database will save considerable time and allow for better targeting of areas where burden can be reduced, including optimizing regulatory pathways for timelier processes. Areas where more regulation is needed can be more easily identified as well.

In our discussion with several provincial governments, we heard that better measurement facilitated a culture change. Both British Columbia and, more recently, Alberta reduced regulatory requirements by one third while maintaining health, safety, and environmental protections ^{Footnote 3}. We also heard examples where new products remained unregulated for years. In these cases, a searchable database would deliver valuable time savings and help different departments align quickly on what legislation, regulation and policy currently exists ^{Footnote 4}. Such a database would also save business and civil society time and allow them to provide higher quality advice to government consultations.

Measurement is foundational to accountability and trust in the system. The Regulatory Platform will boost transparency of regulatory burden for Canadians by providing accurate and consistent counts.

Seek outside advice

The importance of ongoing conversations between regulators and Canadians cannot be overstated. A culture change from “one and done” consultation to ongoing engagement and continuous improvement throughout the life cycle of regulation and its administration is essential. General themes that came out in the previous EACRC and in our committee’s discussion include the importance of plain language, outreach that starts early, making compliance as simple as possible, and creating easier ways for users to provide feedback.

The first EACRC expressed concern that their recommendations would not create enough momentum around the culture, mindset, and institutional changes needed to modernize the regulatory system to benefit Canadians. We share the same concern and urge government leaders to become very proactive in this space. We want to see continued accountability around the outside advice the external advisory committees have provided.

Recommendation: Maintain strong avenues for external advice. We suggest another external advisory committee to report on progress on the key elements we have identified in our advice letters, including measurement. We recommend maintaining some members of this committee for continuity as that worked well between the first and second EACRCs ^{Footnote 5}.

Benefits: Maintaining an independent advisory committee provides valuable outside connections for Canada’s regulatory system. The model of this committee is a good one as it is nimble, cost-effective (members are volunteers), and can evolve. It provides the government with fresh thinking and is a mechanism for accountability. Institutionalizing outside advice by finding regular avenues to use it supports momentum for regulatory excellence. If, instead, the approach and advice from the two EACRCs are treated as “one and done,” we fear, as did our predecessor committee members, that we will be another committee that volunteers time and expertise to provide advice that is not used, and we will not see the progress critical to the well-being of Canadians.

In conclusion

Thank you for your leadership in championing regulatory excellence. We also want to thank the Treasury Board staff for modelling the change we are looking for in the system by setting up two sequential committees tasked with providing independent advice. Finally, we want to thank the many people who took time to present to us, including those from provincial governments, Government of Canada departments and agencies, from international governments, from business representatives, and representatives from civil society.

It has been our pleasure to volunteer our time to continue to provide independent outside advice that goes beyond describing symptoms to providing advice to address deeper challenges. We come from diverse backgrounds and share the belief that regulatory excellence is the right frame for Canada’s regulatory system and should be a competitive advantage. Making this a reality will require focus across governments. We urge implementation of our advice to support acceleration of progress in delivering on the potential of regulatory excellence to lift our living standards. Canadians deserve nothing less.

Sincerely,

Laura Jones
Chair, External Advisory Committee on Regulatory Competitiveness

On behalf of Committee members:

Yves Bourgeois
Christian Dandeneau
Robin Ford
Keith Mussar
Shino Nakane
Nancy Olewiler

Appendix A: Regulatory Excellence

Figure - Text version

Appendix A consists of a figure that illustrates how regulatory excellence is the result of strong protection and minimizing unnecessary burden.

At the top of the figure is a heading that reads, “Regulatory Excellence.” Below this heading are two phrases that appear on one line, separated by a “plus” symbol. The two phrases are “Strong protection” and “Minimizing unnecessary burden.”

Below the heading and two phrases is an illustration of four equally sized quadrants, created by a vertical axis intersecting with a horizontal axis at the midpoint of each axis.

The top point of the vertical axis shows an arrow pointing upward. The top point of this axis is labelled “Stronger protection.” The bottom point of this axis is labelled “Weaker protection.”

The left point of the horizontal axis has a label that reads, “Lower burden.” The right point of this axis shows an arrow pointing right. The right point of this axis is labelled “Higher burden.”

The top left quadrant is labelled “High protection with minimal unnecessary regulatory burden.” This quadrant also contains a star to indicate that the conditions of high protection with minimal unnecessary regulatory burden are the most desirable.

The top right quadrant is labelled “High protection with unnecessary drag on productivity.”

The lower left quadrant is labelled “Inadequate protection and low regulatory burden.”

The bottom right quadrant is labelled “Inadequate protection and unnecessary drag on productivity.”

Appendix B: Cabinet Directive on Regulation (CDR)

The CDR and its supporting policies and guidance should include the idea of regulatory excellence as a “North Star.” There are opportunities to use plain language and enhance the guidance documents that support the CDR with more examples. Guidance around the United Nations Declaration on the Rights of Indigenous Peoples Act (UNDA) also needs to be included. A few other items to consider including:

• Encourage early engagement and continuous conversation with affected parties. Provide examples of how this can improve design and outcomes. Place emphasis on “understand those you regulate.”
• Where appropriate, include the perspective of front-line service staff and inspectors to ensure that design and implementation work together.
• Emphasize the importance of clarifying desired outcomes and incorporating good measurement where possible.
• Work with interested parties outside of government to clarify the concept of agility and assess its relevance for the CDR.

Stock reviews

Regularly reviewing the stock of regulations as well as guidance, policies and service delivery are important to effectively manage our regulatory asset. Strengthening digital tools can improve efficiency. For example, the Transport Canada measurement tool referenced earlier in this letter could be helpful in ensuring that departments can easily assess their stock and look for priorities for review.

A policy on stock review should include expectations regarding:

• Timing: review regulations within a prescribed and appropriate time frame (for example, five years) in addition to considering alternative opportunities (for example, change in risk profile, mandate letters to ministers) to trigger reviews and ensure regulations remain fit for purpose.
• Prioritization: prioritize reviews that will deliver the most value.
• Accountability: continuous communication and public reporting are essential, including sharing the results of how public feedback is considered and/or addressed. Ongoing performance measurement (that is, regulation working as intended) is key to informing stock reviews.
• Scope: Ideally, the scope of review includes regulations and how well they are being administered (for example, ensuring compliance requirements are not unduly burdensome and audits are effective).

Previous recommendations

We are satisfied that many of the 44 recommendations from the first version of the EACRC (2019–2021) have been or are in the process of being implemented, for example, the targeted regulatory reviews around digitalization, clean technology, and international standards. Other recommendations, such as the recommendation to accelerate progress toward regulatory excellence and modernization, have been reiterated by this committee, deserve urgency, and will always be a work in progress. One of the most important and still outstanding recommendations from the first committee is around the need to improve measurement and transparency. We address this in the main recommendations in this letter.