Advice to the Treasury Board (May 2019)

Treasury Board of Canada
c/o The Honourable Joyce Murray
President of Treasury Board
90 Elgin Street, 8th Floor
Ottawa, Ontario K1A 0R5

May 24th, 2019

Dear Minister:

Thank you for meeting with the External Advisory Committee on Regulatory Competitiveness (EACRC) and challenging us to advance bold ideas as we consider our mandate to provide recommendations to Treasury Board on how to improve regulatory competitiveness in Canada while maintaining, and improving, protections for health, security, safety, and the environment.

The Committee understands the strong emphasis that was put on the importance of regulatory modernization and innovation to Canada’s future at the Advisory Council on Economic Growth and the Economic Strategy Tables. Indeed, while we do not underestimate our current challenges, we believe there is an opportunity to make regulatory excellence a key strategic advantage for Canada. Capitalizing on this opportunity will require a commitment to a change in mindset that has already started in some areas of government. We will have more to say about this in the near future.

As a first order of business, the Committee has been asked to make recommendations for sectors or themes to address in the next round of Regulatory Reviews.

After considering a range of potential options, we recommend the following three areas for the second round of Reviews: digitalization, clean technology, and international standards – all of which are enablers of economic prosperity.

In conducting these Reviews, the Committee recommends that the Treasury Board ask its questions in such a way that participants do not feel limited in providing feedback either with respect to “big ideas” or with respect to the multiplicity of smaller issues, such as overly complicated forms or not being able to find information on websites, that together adds up to a large cumulative burden. The digitalization Review in particular is an opportunity to engage broadly with citizens to identify issues that may be relatively easy to fix. The benefit of simplifying overcomplicated transactions for Canadians should not be underestimated as it can give people back valuable time, improve compliance and enhance productivity. We provide a few additional thoughts on each of the possible Reviews below.

Digitalization

Digitalization is rapidly changing everything from how we consume news to making lumber mills more efficient and safe. By embracing the transformational potential of digital tools, there are huge opportunities to modernize and simplify regulatory interactions in this area to the benefit of all Canadians including:

• Ensuring regulations are “technology neutral” to allow businesses and citizens the freedom to adopt the technology they deem appropriate to meet regulatory aims (e.g., ensuring forms can be submitted online rather than requiring outdated technologies);
• Ensuring the regulations do not impede the adoption of new technologies;
• Ensuring that frequently accessed forms are easy to find on government websites, are use-centred, easy to use, and digital end-to-end;
• Using digital optimization to reduce mistakes and the need for resubmitting forms;
• Enabling more efficient processes for permissions, certifications, inspections, and business reporting (e.g., allowing for electronic signatures);
• Embracing new technologies and approaches in the regulatory process, such as the automated reporting of data through linked systems; and
• Generally freeing up time and unleashing productivity in both the private and public sectors.

We want to emphasize that every effort should be made to consider the user experience and make things as simple as possible to save time and frustration while increasing compliance. For example, simply putting a difficult-to-understand form online without taking the opportunity to see if it can be simplified or put in plain language would be a missed opportunity. As changes continue in this area, we also want to encourage the government to continue to be mindful of the realities that not all citizens have access to high-speed internet and digital literacy varies considerably throughout the country.

Clean technology sector

The Committee supports examining the regulatory issues faced by small- and medium-sized enterprises, as well as larger firms that develop and produce clean technologies, and those that adopt these technologies across a broad range of sectors, including the resource sectors. This Review should identify not only areas to reduce regulatory irritants and barriers, but also opportunities to enhance clean innovation and competitiveness – for example by adopting ‘sandboxes’ and world-class regulatory approaches (stringent, flexible, nimble, and predictable) that stimulate demand for new technologies. Such a Review will act on the recommendations of the Clean Technology and the Resources of the Future Economic Strategy Tables, and help position Canadian firms in all sectors to compete in a cleaner and more innovative global economy. The Committee notes that it will be important to keep in mind that clean technology, by its nature, requires a systems approach that cuts across sectoral and departmental lines. Further, any actions stemming from this Review should not have the unintended consequence of government picking firms as winners and losers, but be focused on putting the conditions in place to enable the clean technology sector, as a whole, to thrive, and generate economic and environmental benefits for Canada.

International standards

The Committee supports a thematic Review examining the role of international standards in regulation to support regulatory cooperation, facilitate trade, and foster innovation, while ensuring that health, safety, security, and environmental protections are upheld. The Committee recommends that this Review be strategic in focusing on opportunities for Canada to accelerate its leadership in the development of international standards. We further recommend considering situations in which advancing and adopting international standards advance Canada’s regulatory competitiveness, as well as clarifying when the adoption of international standards may not be in Canada’s best interest (e.g., areas where going beyond international norms may help to drive innovation and position Canadian firms as leaders in key sectors or where it might introduce unnecessary complexity that hinders competitiveness)

As the Committee contemplates future recommendations, it will do so with the diverse perspectives of Committee members in mind. The following themes that emerged in our first meeting will guide our work, and should also guide departments and agencies as they undertake these Reviews.

• Culture Change – the Committee will look for opportunities to further improve the culture between Government and stakeholders. This will involve promoting a culture of risk management rather than one of risk aversion; incentivizing good behaviour; and promoting innovative approaches to complex and emerging issues;
• Regulatory Excellence – the Committee will promote simplicity and work to overcome the perception that red tape and additional rules lead to better outcomes. It will make recommendations that recognize that a rigorous yet efficient regulatory system will give Canadians confidence in their protections, and will give businesses the confidence to invest;
• Transparency and Trust – the Committee will seek opportunities to make recommendations that promote a culture of trust and transparency, focus on evidence and a common understanding of the facts, and draw from the best regulatory practices both domestically and internationally;
• Inclusiveness – the Committee will seek opportunities to make recommendations that support having all of the relevant voices at the table, including those affected directly or indirectly, representatives from small, medium and large businesses, citizens, consumer groups, and governments. This will involve promoting the advancement of collaborative solutions, the co-development of regulations, and more effective and productive consultations and engagement mechanisms;
• A Systems Approach – the Committee will strive to examine issues and make recommendations that recognize and address the interconnections between regulatory issues, encourage regulators to work collaboratively on shared issues, and to examine opportunities to promote efficiency throughout the supply chain; and
• Overlapping Regulations – the Committee is concerned with the cumulative impact of regulation in overlapping jurisdictions. As there is an established Federal/Provincial/Territorial Regulatory Cooperation and Reconciliation Table under the Canadian Free Trade Agreement, and the Treasury Board of Canada Secretariat is the federal representative on that table, the Committee may make recommendations to advance discussions there.

As a next step, the Committee will examine domestic and international regulatory innovations that promote competitiveness while supporting the achievement of public objectives; including in the area of reducing red-tape. The Committee looks forward to returning to you shortly with additional recommendations in this area.

We commend the Government for its on-going commitment to modernizing Canada’s regulatory system into one that enables investment and catalyzes innovation.

Regards,

Laura Jones
Chair, External Advisory Committee on Regulatory Competitiveness

On behalf of Committee members:

Dr. Catherine Beaudry
Professor and Canada Research Chair in Creation, Development and the Commercialization of Innovation
Polytechnique Montréal

Stewart Elgie
Professor of Law & Economics and Executive Chair of the Smart Prosperity Institute
University of Ottawa

Ginny Flood
Vice President of Government Relations
Suncor Energy

Anne Fowlie
CEO of AgWise Strategic Solutions
Fruit and Vegetable Dispute Resolution Corporation

Laura Jones
Executive Vice-President and Chief Strategic Officer
Canadian Federation of Independent Business

Don Mercer
President
Consumers Council of Canada

Keith Mussar
Vice-President of Regulatory Affairs
I.E.Canada, Canadian Association of Importers and Exporters

Nancy Olewiler
Director of the School of Public Policy
Simon Fraser University

The views expressed by Committee members are their own and not the views of the organizations with which they are affiliated.