Speeches
Public Policy Forum Dinner
Smart Regulation: Promoting Canada's Competitive Advantage
September 16, 2003
Speech by Gaétan Lussier, Chair
External Advisory Committee on Smart Regulation
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Introduction
Thank you for that kind introduction, and let me begin by saying what a pleasure it is for me to be here today.
I must admit that I feel a certain pride of ownership when I reflect back on the small role I played in helping to get the Public Policy Forum off the ground when, as Deputy Minister for Employment & Immigration, I agreed to have my Department assume responsibility for the salary of one staff for the first year of the PPF's existence!
I was therefore very pleased to accept the kind invitation from PPF President David Zussman to speak to you today in my capacity as Chair of the recently established External Advisory Committee on Smart Regulation (EACSR).
I am very honored that the Prime Minister has asked me to take up the challenge of chairing this committee. And I accepted because I believe that renewing the Canadian regulatory system is important work for the future of the country and because there was an opportunity to make a meaningful and transformative contribution.
Whatever job or task I have accepted, I have always considered myself as a change agent. This is no different. My objective is to instill enduring and sustainable changes in the way Canada regulates so that it fully recognizes 21st century life.
Overview of the speech
My intention this evening is to provide you with an overview of how and where our Committee will be deploying its energies over the coming months, as we move to implement the ambitious agenda we have received from the Prime Minister. At this stage, I have more questions than answers for you, but that is as it should be -- because I want my remarks this evening to encourage you to play an active role in our deliberations and processes.
If there is one absolute certainty in my mind, it is that "smart regulation" can only be built on a solid foundation of collaboration, clarity of purpose, mutual respect and trust.
Government cannot do it alone and nor, for that matter, can a 10-person Committee -- regardless of how carefully its members have been selected to ensure balance and breadth of perspective, and no matter how committed it is to serve as an agent for change.
But what exactly is our mandate, and what precisely is meant by "smart regulation"? Let me briefly answer these questions, before providing you with a summary of our work program and a status report on our progress to date.
EACSR Mandate
The terms of reference our Committee received in May of this year from the Prime Minister, and which we have been asked to complete by next summer, has three distinct components.
The first component is to develop a regulatory strategy for the 21st century, supporting Canada as a sovereign trading nation offering a high quality of life to its citizens.
The second component is to identify priority sectors and areas requiring regulatory reform that are critical to maintaining a "Canadian advantage".
And the third component is to review and provide an external perspective on current regulatory issues identified by departments and stakeholders.
As the latter two components are fairly self-explanatory and require that we get the first component right, there is little need for me at this point to elaborate on them at any great length. Suffice it to say that the requirement for our Committee to identify priority areas and specific issues for reform, means that the exercise we have embarked upon is far from theoretical and will start the transformation of the system.
And hopefully this will give you added impetus to share with us your expertise and opinions.
For now I want to focus on the first component of our mandate - Creating a 21st century regulatory strategy for Canada.
Pressures
There are many pressures that are affecting the regulatory system, and I want to highlight three that are of particular importance.
The first is coping with the rapid pace of change. This is particularly an issue with respect to science and technology developments. The regulatory system will be impacted at a number of levels. Advances in areas like the life sciences and biotechnology pose increasingly complex challenges for legislators and regulators, including how to address risk and how to resolve the inevitable ethical dilemmas to which these advances give rise. We will also need to ensure that the existing stock of regulation is continually renewed to reflect new knowledge. This is essential not only for enabling innovation and growth but also to ensure that when better, safer or cleaner ways of producing things or delivering services become feasible, Canadians obtain the benefits as quickly as possible. With highly trained professionals in many emerging areas of scientific endeavour already in short supply, a critical issue for the government will be to attract, maintain and develop a cadre of qualified regulators.
The second area is the need to align the Canadian regulatory system more strategically and deliberately with our trading partners. We are one of the most trade-dependent nations. As a country whose prosperity is directly linked to our exports, we will also need to reflect on the degree of fit between our regulations and those of our trading partners. Not only is this one of the most important issues for industry, but as I have just said, in a world where knowledge evolves fast, it is becoming increasingly difficult for a single country to do everything by itself. I know that Federal Departments are already cooperating with other countries. The issue is therefore how do we do this more strategically and more deliberately. In which circumstances do we align our regulatory regimes? With whom, on what, and how? In which circumstances should there be a Canadian-made solution? Where would it be beneficial for Canada to be a regulatory leader?
And the third area is the need for better integrated regulatory institutions, policies and tools. Regulating is an act of public interest. It should be developed from the citizen's perspective. At the same time, this should be done with true care to make it simple, streamlined and not overly costly for the regulated party to comply. This calls for the different orders of governments and different departments to work more closely together and take a more holistic approach to policy issues and policy instruments.
Shifting values, rapid technological advances, the constant need for new capacity, changing market imperatives, the globalization of commerce, and on and on...
Clearly, developing a new regulatory framework that can effectively reconcile these various interests is a tall order for a part-time, time-limited Committee. Unless, of course, our Committee can count on the support of eminent Canadians like yourselves and of the organizations you represent or with whom you are affiliated.
It must be recognized that a regulatory system is in many ways the expression of the identity of a country. What and how governments regulate speaks volumes about Canadians' notions of individual, institutional and governmental accountability.
If you ascribe to the proposition -- as our Committee does -- that public trust is an essential ingredient for an effective regulatory system, this requires us to try and gauge what it is Canadians expect from their regulatory system, and what changes will be required to provide them with the system they want and which will also maintain their trust.
Are Canadians more or less risk adverse today than in the past? At what point do they believe public interest and commercial interest should intersect? Is there a threshold at which the trade-off between more growth and a cleaner environment becomes untenable? Are Canadians prepared to see an ever-greater emphasis on performance-based regulation and the use of tax incentives and other market-based approaches, as alternatives to more traditional and directive forms of regulation?
These are not philosophical questions; they are very real and practical ones, and the onus will be on our Committee to demonstrate that the directions we propose in our final report will resonate with Canadians.
I would argue that Canadians still trust their regulatory system, particularly when we compare ourselves to Europe. This trust cannot be taken for granted. It has both a social cohesion and an economic value. It needs to be sustained and strengthened. This protection is not only granted by government. Industry has a very important role to play in this regard.
I'll say it yet again: we need your help to make this "smart regulation" agenda a win for all Canadians!
Smart Regulation
But what is a "smart regulation" or more appropriately, what does smart regulation entail?
Let me start by stating, for the record, that this is NOT a deregulation exercise. Nor is it a "reducing the paper-burden on business" initiative. And it is NOT an effort to cull from the existing stock of regulation those that have outlived their usefulness.
While such outcomes may eventually prove to be happy by-products of our efforts, they are not our raison d'etre.
What we have been asked to do is to recommend ways to make the practice and process of regulation in Canada, relevant to the changes inherent in 21st century life.
This means:
- that in addition to its traditional role of protecting the health and safety of Canadians and of the environment, regulation serves to encourage innovation and entrepreneurship.
- that consumers can enjoy more choice and make more informed decisions.
- that our markets remain dynamic, flexible and responsive.
- that businesses can more easily export our goods and services to global markets.
- that investors see Canada as a desirable place to invest.
But if those are the ends, then what are the means? How can we achieve the profound cultural change that will be needed to enable all of the actors in this field to move forward together?
It means that governments, business and citizens will have to play different roles, will have to assume different responsibilities, and will have to establish and nurture different relationships. I would argue that this has already started. But let me raise some questions related to what this could mean.
If industry wants a regulatory system that is less directive and more market driven, will it have to be prepared to accept greater liability for the products or services it delivers, to operate in a more transparent manner, and to invest more in educating consumers about risk.
If consumers want greater choice and faster access to the flood of new science-driven amenities that are on the horizon, will they have to be prepared to assume greater risk and take more personal responsibility for staying informed and for the choices they make.
If as a country we want to realize the benefits of selling our products and services in a larger global market, or to attract a larger share of job-producing investment, will we have to accept more foreign competition in our domestic markets and create a regulatory system that is more outwardly focused and globally competitive.
Collaboration, transparency and accountability... these are key to the cultural change that will be required if we are to be successful.
And we all want an integrated regulatory system, where strategy and process work
hand-in-glove. So how will we get there?
Vision and Principles
Our Committee's initial views are expressed in a Vision and Principles statement that we have developed to guide our activities. The statement is premised on ensuring regulation continues to both protect Canadians and enable innovation by making the practice more effective, flexible, collaborative, transparent, and accountable.
You will notice that at the core of the vision is the notion of collaboration. I truly believe that the transformation of the regulatory system will happen only if governments, business and citizens work together.
Let me take you quickly through the three components of the vision.
Whatever changes are eventually brought, the regulatory system must instill trust, confidence and credibility at home and abroad in Canadian products and services, markets and government institutions.
The regulatory system should enable innovation. It should make it easier for entrepreneurs to develop and sell new products and services. In the regulatory world, there is no difference between perception and reality. Canadian regulation must not only be conducive to innovation; it also has to be perceived as such both domestically and abroad.
Finally, the regulatory system must be effective in protecting the public interest, and it must be clearly demonstrated to citizens that this is not at stake as governments find new and innovative ways to regulate, particularly as international regulatory cooperation increases.
These are all elements of what we believe to be a "smart regulation" agenda. You will find copies of our Vision & Principles statement at the back of the hall. I encourage you to review it and to share your thoughts on it with us. The Vision and Principles statement is only one component of a broader consultation plan that is at the heart of our Workplan.
EACSR Workplan
So at this stage, some 4 months into our mandate, its fair for you to ask what it is we've been doing, and where our Committee is heading.
To date, in addition to informal discussions, our Committee has solicited direct input by mail from over 100 business and professional associations, consumer organizations, universities, and aboriginal organizations. We have also communicated with provincial and territorial governments to benefit from their counsel and advice.
We have held three formal EACSR meetings, during which we received briefings from federal deputies, senior officials and expert consultants on the regulatory challenges and opportunities confronting the federal regulatory system.
Finally, work has been undertaken to research how other jurisdictions, both within and outside of Canada, have sought to renew and revitalize their regulatory systems to advance various public policy objectives.
As you might expect, identifying which aspects of Canada's regulatory system to focus on is a key decision for a time-limited Committee whose members work on a part-time basis.
Since we cannot possibly address every challenge confronting Canada's regulatory system, or every issue that is brought to our attention, we felt it imperative to focus our efforts on a limited number of areas where we feel we can have a real impact.
To that end, in addition to the Vision and Principles statement that we have developed to frame our efforts, we will focus our research and fact-finding on six over-arching issues:
- The first is Defining the Public Interest. How have Canadian values and interests changed over the last 10-15 years and what does this mean for a Smart Regulatory Strategy? What will the public interest mean in the coming decade given the stresses of new technologies, globalized markets, new environmental and health risks and the demand from stakeholders for greater speed, responsiveness and transparency?
- The second is International Cooperation. We want to address such dimensions as regulatory cooperation, harmonization and mutual recognition, with respect to the free movement of capital, services and goods. What are the options for Canadian innovation and leadership in a trade-dependent economic environment? What leadership role should Canada play in multilateral fora and in international standards setting agencies? What process is required for determining when and how we should adopt or recognize the regulatory standards of other countries?
- The third is Federal-Provincial-Territorial Cooperation. What new mechanisms or approaches are needed to make faster progress in this area? What are key priorities for inter-jurisdictional cooperation? Where a project or undertaking requires regulatory approval from multiple jurisdictions, how can they work together to streamline the process that proponents have to go through to meet all of the legal, technical and operational requirements of each jurisdiction?
- The fourth is Process Efficiency. How can we improve the quality, timeliness, efficiency, and the transparency of our regulatory system? How can we ensure the regulatory system has the human and technical resources necessary to keep abreast of scientific and technological advances?
- The fifth is Risk Management. How do we regulate in the absence of full knowledge of the potential effects of very promising, but recent technological advances? What could be innovative options to effective and proactive formulation within a Smart Regulation Strategy?
- The sixth is Instrument Choice. How do we implement a proactive government-wide approach to choosing the most effective instrument mix for achieving policy and regulatory objectives?
We are developing discussion papers, commissioning research or preparing case studies relevant to these issues, all of which will be posted on our interactive web site. We also plan to convene separate expert discussion panels on each of these issues, and to post the results of their deliberations on our web site. These inputs will be an important part of our consultation efforts that will continue through to the end of the year.
We would welcome any suggestions, as well as your input on any aspect of our Committee's work.
The URL for our interactive web site is www.smartregulation.gc.ca. I encourage you to check the site periodically for updates on our activities, to review our research and share with us your views and advice.
Conclusion
In closing, I would simply make the observation that the regulatory system we currently have in Canada was largely developed for an industrial economy, and it has served us extremely well. But Canada now needs a regulatory approach designed for the knowledge age.
Getting there will take no small amount of effort on our Committee's part, but also on your part! I have every confidence you will work with us to make this initiative a success.
We are determined to produce a final report that makes a real contribution to our quality of life and to our international competitiveness.
Thank You!
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