ANNEX III: A PROPOSAL FOR A NEW REGULATORY POLICY FOR CANADA

Our Pledge to Canadians

The Government of Canada will work with citizens, businesses and other governments to enhance our national regulatory system in order to maximize the benefits of regulation for all Canadians, enable Canadians to take advantage of new knowledge and support Canada’s participation in a dynamic global economy.

The Government of Canada is committed to:

• instilling trust, confidence and credibility at home and abroad in Canada’s regulatory system and in Canadian products and services, markets and government institutions;
• ensuring that our national regulatory system encourages innovation, market performance, competitiveness, entrepreneurship and investment in the Canadian economy; and
• demonstrating to citizens that the regulatory system will safeguard the Canadian public interest, which includes such issues as human health and safety and environmental protection, within dynamic global markets.

Scope of Policy

This policy recognizes that regulation is a form of intervention that is not limited to primary and secondary legislation but also includes a variety of instruments which are more effective when used as part of a mix. This policy sets out the commitments that will guide the Government of Canada when making decisions on whether to use regulatory intervention, what form of regulation to use and how to ensure that regulatory action accomplishes its objectives. The policy applies to all aspects of the regulatory process, including the development, administration, implementation and enforcement of regulation and regulatory programs.

Context

Regulation is an essential and valuable tool for achieving public policy objectives, advancing national priorities and furthering the public interest. With this policy, the government commits to employing regulatory intervention, in conjunction with other instruments, where necessary and appropriate to protect and enhance the welfare of present and future generation of Canadians. The concept supporting this policy is that the relationship between economic performance, environmental quality and social/human welfare is interlinked and that regulation should advance these objectives concurrently wherever possible.

The government recognizes that Canadians are currently experiencing a time of rapid scientific and technological change, heightened expectations of government for individual, economic and national security, and the accelerated flow of trade and movement of people throughout the world. Regulatory intervention, whether it is at the development, administration, implementation or enforcement stage, must adapt constantly to these changes in order to ensure the protection of the health and safety of Canadian citizens, the promotion of sustainable development, the efficiency and fairness of the marketplace as well as the creation of a business environment supportive of innovation and investment.

This rapidly changing environment brings both opportunities and risks that can be effectively addressed only through the collective action of individual Canadians, the governments that serve them, businesses, voluntary sector organizations, foreign governments and international organizations. Increased cooperation between these players will contribute to solutions to regulatory issues that will be in the public interest and that will maintain and increase trust in the regulatory system. Business people, representatives of non-governmental organizations and individual Canadians are therefore expected to play a role, not only in the process of devising regulatory policy, but also in seeing that the promise of the policy is translated into concrete results.

Statement of Commitments

The policy is based on the following principles: effectiveness, timeliness, cost-efficiency, transparency, and accountability and performance.

Effectiveness

The government is committed to ensuring that regulation is aligned in a coherent and integrated manner within the federal government to advance government policies and priorities.

The efficient coordination of various regulatory authorities is central to a well-functioning regulatory system. Federal departments and agencies will coordinate their actions in the development of new regulatory intervention and in the administration and implementation of existing regulation. This policy commits the government to ensuring that relevant federal organizations coordinate their regulatory interventions to maximize the effectiveness and achievement of policy objectives. Regulators must understand the cumulative impact of regulation and seek to avoid overlap, duplication and inconsistency.

The government is committed to working cooperatively wherever possible with other jurisdictions, both within Canada and internationally, when studying regulatory issues and designing regulatory interventions.

The government is committed to cooperating with the provincial and territorial governments to create a seamless regulatory environment in Canada. It will also adopt international approaches wherever possible. Regulatory differences between Canada and its major international partners will be minimized. Specific Canadian requirements may be appropriate when there is no commonly agreed upon international or North American standard, when the federal government is pursuing important national priorities, or when there are unique Canadian circumstances or constitutional values requiring different approaches. When specific Canadian requirements are adopted, the government will seek to reduce or minimize the cumulative impact of regulatory differences. When developing or modifying regulation, federal regulatory authorities must make sure that international and intergovernmental agreements are respected.

The government is committed, before taking regulatory action, to ensuring that it has a sound and scientific understanding of those risks requiring regulatory action, the forces that will cause those risks to change in the future and the consequences of any action the government may take to manage those risks.

Regulation will reflect the latest and best knowledge. An analysis of risks and how they change over time is the foundation for regulatory impact analysis. The government must demonstrate that a problem or risk exists and that federal government intervention is justified. The government is committed to developing a thorough understanding of the problem that is prompting regulatory intervention, with a focus on the set of factors that are influencing the risks and how those risks may evolve in the future. The government will seek the knowledge of Canadian and international experts, particularly in regard to the nature and significance of the risks being addressed and to the design of regulatory measures. It is recognized that the government does not make public policy decisions solely on the basis of advice provided by scientists, economists, mathematicians, statisticians, lawyers or any other type of expert, but that it will consider this kind of evidence when making a regulatory decision.

Cost-Efficiency

The government is committed to establishing priorities for regulatory intervention, risk reduction and the administration of regulatory programs and is committed to being prudent in applying the resources provided by Canadian taxpayers.

The government will adopt a principled and predictable approach to risk management and, in particular, to priority setting for new regulatory interventions. The government will exercise prudence in allocating regulatory resources consistent with its stewardship role. It will also ensure that it has the necessary resources to discharge its enforcement responsibilities and ensure compliance with regulation.

The government is committed to designing and implementing regulatory intervention in a way that maximizes the benefits and minimizes the costs for all Canadians.

Regulatory intervention must generate “net benefits” for society, which will include social, environmental and economic factors. Regulatory action will be commensurate with the scope of the risk or problem. A variety of regulatory and policy approaches will be evaluated to determine the optimal mix of policy interventions to produce the greatest net benefit. The government will recognize and take into account the circumstances under which small and medium-sized enterprises operate when it regulates.

Timeliness

The government is committed to ensuring that regulatory development and decision making reflect the latest knowledge and that regulatory programs are regularly reviewed to maintain their relevance and effectiveness in achieving the intended results.

Regulation should be based primarily on standards and performance targets. Regulatory measures must be regularly and systematically reviewed and, when necessary, eliminated or modified to ensure responsiveness. New measures should be created to take into account progress towards the policy objective, consumer needs, citizens’ expectations, scientific and technological advances and the changing business environment.

The government is committed to making decisions and implementing regulatory requirements in a timely manner.

The government is committed to ensuring timely and predictable action for the design of regulation, decision making and implementation. When appropriate, service standards and timelines will guide the development of regulation and decision making. In circumstances where an issue is particularly complex or when available evidence is not conclusive, it may be in the public interest to delay a decision. In those circumstances, relevant stakeholders will be informed and advised of the rationale for the delay.

Transparency

The government is committed to developing, approving and implementing regulatory policies and decisions in an open, transparent and inclusive manner.

A regulatory culture that emphasizes and encourages openness, transparency and inclusiveness is a prerequisite for building public trust in Canadian regulation and the integrity of the process. Transparency is central to meaningful accountability and continuous improvement of regulatory performance. Government decision making will be transparent and timely in providing the rationale for decisions. The government is committed to providing stakeholders with opportunities to meaningfully challenge both the performance and decisions of regulators. Stakeholders who cannot resolve an issue directly with a regulator will have access to effective recourse mechanisms, allowing for complaint resolution and the provision of whole-of-government positions.

The government is committed to consulting broadly with Canadians, businesses and citizens’ groups when developing new regulatory requirements and revising existing ones.

A new cooperative relationship between governments at all levels, citizens and business is the basis of smart regulatory governance. They need to participate in all aspects of regulatory governance through active consultation and engagement. The government will put in place the conditions that will facilitate the participation of all interested parties and citizens. The government is committed to communicating and sharing information with Canadians about regulatory issues and the consequences of various regulatory and policy options in a clear, open and timely manner. This commitment points to a relationship that is based on trust and an understanding that regulatory solutions require input and advice from a broad cross-section of society. Regulatory and policy development will be most effective if it is implemented as a process of collective learning.

Accountability and Performance

The government is committed to explaining to Canadians how a new regulatory intervention is in the public interest and specifying the results expected from regulatory intervention. The government is committed to monitoring its regulatory performance, providing meaningful reports to Canadians and ensuring accountability for the results generated through regulatory action.

Performance monitoring and management practices as well as effective accountability are essential to an effective regulatory regime. Proposals for new regulatory intervention must incorporate and communicate explicit performance expectations with respect to regulation. The government will establish and operate an effective accountability regime that is focused on results. The government will sustain its capacity and strive for continuous improvement in its ability to develop regulatory policy and to administer and enforce regulatory programs.

Note: This policy should be supported by a series of documents (e.g. a public interest accountability framework) providing detailed guidance for government officials on the regulatory process and analytical requirements. The documents should be available to the public via the Privy Council Web site (www.pco-bcp.gc.ca). They should also spell out the roles and responsibilities of all the actors in the regulatory system, including the different federal authorities, interested stakeholders and citizens.