ANNEX IV: RECOMMENDATIONS

PART I: STRATEGY

International Regulatory Cooperation

Recommendation 1: The federal government should include international regulatory cooperation as a distinct part of Canadian foreign policy. To this end, it should develop a strategic policy framework for international regulatory cooperation that identifies priorities for coordinated federal and national action. The framework should provide guidance in the following areas:

• the design and implementation of regulation in Canada;
• an agenda for regulatory cooperation in North America; and
• Canada’s key bilateral and multilateral relationships.

Recommendation 2: When developing new regulatory frameworks, the federal government should review and adopt international approaches wherever possible. The federal government should limit the number of specific Canadian regulatory requirements.

Recommendation 3: Specific Canadian regulatory requirements may be appropriate when:

• there no commonly agreed upon international or North American standard;
• important national priorities, unique Canadian circumstances or Constitutional values require different approaches; or
• the government does not have sufficient confidence that the regulatory processes, practices, results and/or decisions of a trading partner will meet Canadian policy objectives.
 

Recommendation 4: Where specific Canadian regulatory requirements are adopted, the federal government should reduce or minimize the cumulative impact of regulatory differences on trade and investment by:

• assessing alternative instruments for meeting policy objectives (e.g. voluntary measures, information strategies);
• promoting the use of performance-based approaches where possible; and
• establishing the appropriate accountability structures to review requirements regularly to ensure that policy objectives are being met and eliminate those regulations that are no longer necessary.

Recommendation 5: North America should be the primary and immediate focus of the federal government’s international regulatory cooperation efforts. The federal government should work to:

• achieve compatible standards and regulation in areas that would enhance the efficiency of the Canadian economy and provide high levels of protection for human health and the environment;
• eliminate small regulatory differences and reduce regulatory impediments to an integrated North American market;
• move toward single review and approval of products and services for all jurisdictions in North America; and
• put in place integrated regulatory processes to support key integrated North American industries (e.g. energy, agriculture, food) and provide more effective responses to threats to human and animal health and the environment.

Recommendation 6: The federal government should work with its U.S. and, where appropriate, Mexican counterparts to build mutual trust and confidence in each other’s regulatory processes and decisions through the increased use of independent peer reviews of these regulatory processes, information sharing, shared data collection and risk assessment methods, common decision-making procedures and joint reviews.

Recommendation 7: Canada should promote joint and single product reviews for multiple markets. Canada should also move toward accepting the approvals and reviews of products by its U.S. and EU trading partners in sectors where there are well-established, internationally recognized conformity assessment procedures already in place.

Recommendation 8: Canada should identify and target the areas where it wants to be an international leader, focusing on those areas that will produce maximum benefit for Canadian citizens and businesses, for example biotechnology, natural resource development and cultural diversity.

Federal-Provincial-Territorial Regulatory Cooperation

Recommendation 9: The federal government should pay urgent attention to creating a more seamless regulatory environment in Canada. Federal-provincial-territorial cooperation should be formalized in a new joint arrangement between governments, to be initiated through a discussion involving First Ministers. The new process should focus on key priorities (e.g. environmental assessments), identify and address impediments to cooperation, develop a framework to guide regulation making, and publish regularly on the state of regulation in Canada.

Recommendation 10: The federal government should ensure the early involvement of provincial and territorial governments in developing Canadian positions on international regulatory issues that have an impact on their jurisdiction, and the two orders of government should work together to ensure the effective implementation of these international obligations.

Recommendation 11: Building on the report of the Federal-Provincial-Territorial Working Group on Regulatory Reform, the federal government should work with provincial and territorial governments on two priorities:

• developing a common and consistent regulatory approach to environmental assessments. Given that environmental assessments often have an impact on Aboriginal communities, federal and provincial/territorial governments should also involve Aboriginal peoples, where they have key interests; and
• exploring a cooperative approach to regulating in the area of biotechnology and emergent technologies.

Federal Regulatory Cooperation

Recommendation 12: The Privy Council Office should establish a mechanism to support interdepartmental discussion and foster the development of government-wide positions on regulatory issues and ensure that departments take appropriate action to align regulations with national priorities.

Recommendation 13: Overarching regulatory policy frameworks should be developed that spell out the government’s objectives in a sector or area of regulation. These frameworks would provide overall guidance to the various regulatory authorities and ensure that regulatory action is coherent and integrated. For example, policy frameworks should be established for sectors such as biotechnology and issues such as international regulatory cooperation.

Recommendation 14: The federal government should provide stakeholders and the public with single window access. It should also take a leadership role in working with other orders of government to create single window service.

Recommendation 15: In the case of significant investment projects, the federal government should designate coordinators with the appropriate decision-making authority to oversee the regulatory involvement of various federal departments.

Risk Management

Recommendation 16: The federal government should develop a risk management framework for regulation that would include the three following core elements: risk prioritization, risk assessment, and risk communication and consultation.

Recommendation 17: The federal government should undertake periodic risk scanning exercises and ensure that regulatory programs and resources are allocated to address Canada’s risk priorities.

Recommendation 18: The federal government should develop a federal risk assessment standard or guidelines for regulation that would include: 

• a federal strategy to systematically and strategically access the best scientific information and knowledge to support regulatory decisions;
• the coordination of risk assessments across departments;
• the classification and prioritization of risks, including the identification and publication of the risk priorities of each regulatory department;
• regular scanning of the public policy environment;
• systematic re-evaluation of these risk priorities in order to account for advances in information and science, results accomplished by the regulatory programs and changes in the public environment, and to respond to new sources of risk; and
• a regular review of the government’s scientific capacity.

Recommendation 19: Federal departments should frame and establish processes for the application of precaution in specific situations, such as when the potential risks or benefits to society are a high priority; when the level of scientific uncertainty is high; when there is a significant lack of societal consensus due to a fundamental clash of values; or when the regulatory framework is unclear or inadequate for addressing new emerging risks. For these situations, they should:

• develop protocols and processes for decision making and how they plan to use precaution in decision making;
• explain the rationale for the use of the precautionary principle to the public;
• consider independent peer reviews to assess the rationale for acting rather than waiting for more evidence; and
• commit to the regular review of significant decisions based on the precautionary principle to determine if information has become available that is relevant to the decision.

Recommendation 20: The federal government should develop and publish federal guidelines for risk communication that provide:

• a clear and transparent explanation of the rationale for decisions and how they were made, including the relative weight assigned to the various factors used in decision making;
and
• a strengthened role for the federal government as a reliable provider of scientific and other relevant information to consumers, parliamentarians and the media.

Recommendation 21: The federal government should develop guidelines on how public engagement could be used to gain a better understanding of public risk tolerance and to obtain input into key risk management issues and options.

Instruments for Government Action

Recommendation 22: The government should develop a framework for the design and use of a mix of instruments, including compliance and enforcement strategies. It should also establish mechanisms to ensure that instrument decisions are more strongly debated throughout the policy development cycle, notably by requiring that the Privy Council Office’s challenge function be exercised earlier in the process.

Recommendation 23: The federal government should accelerate efforts to make the regulatory community aware of the various instruments available and the benefits of using a combination of tools to solve policy issues.

Recommendation 24: Legislative constraints on creating mixes of policy instruments and using performance-based regulations should be eliminated.

Recommendation 25: The government should examine expanding the appropriate use of economic instruments in Canada. Efforts could include the following:

• examining the opportunities and challenges associated with EFR in Canada and addressing whether and, if so, how EFR could be implemented to support environmental policy goals;
• identifying several economic instruments which could be used to attain environmental policy goals and assessing their effectiveness, either individually or as part of an instrument mix;
• identifying areas where fiscal measures act as disincentives to achieving environmental policy objectives and finding ways to redress the situation; and
• launching pilot initiatives to examine the effectiveness of economic instruments in achieving policy objectives. For example, the government could design and implement one or more pollutant charges or taxes as well as incentives to accelerate the adoption of innovative environmental technologies.

The Regulatory Process

Recommendation 26: The Government of Canada should give priority to developing a new federal Regulatory Policy that would:

• reflect the Committee’s vision, principles and proposed regulatory strategy as outlined in this report;
• apply to broader aspects of regulatory intervention, including statutes, regulations, specified quasi-legislation and the negotiation of international positions; and
• target or “tier” the procedural requirements to accommodate such matters as level of risk and impacts.

Recommendation 27: Existing statutes should be reviewed to identify and remove impediments to Smart Regulation. Statutes and regulations should be clearly drafted and allow for the use of modern regulatory techniques.

Recommendation 28: The government should implement a risk-based approach to regulatory action to improve analysis and decision making by requiring that all proposals for regulatory statutes and “significant” or “very significant” regulations be accompanied by an appropriately tiered risk-based policy analysis. The risk-based policy analysis should be open for public comment and reviewed by experts in the relevant discipline.

Recommendation 29: The government should strengthen the performance measurement of regulation by requiring that all proposals for regulatory bills and “significant” and “very significant” regulations be accompanied by a public performance measurement plan.

Recommendation 30: The government should ensure that attention is paid to regulatory program implementation and compliance early in the policy development process by requiring that “significant” and “very significant” regulations be accompanied by a compliance plan.

Recommendation 31: The Department of Justice, the Privy Council Office and federal departments should work in collaboration to introduce legislation that would make a range of compliance measures available to all departments.

Recommendation 32: The government should improve its capacity to approach consultation as a dialogue that promotes collective learning about risks, options for instruments, effective compliance strategies and the potential impacts of regulatory action. It can do this by improving coordination, increasing financial support to consumer groups, exploring new consultation techniques or mechanisms, and developing and disseminating guiding principles to more clearly frame consultation exercises.

Recommendation 33: The government should capitalize on the potential of e-government as a tool for citizen engagement and as a vehicle for single window access to government regulatory programs; in particular, a Smart Regulation gateway and departmental virtual regulatory agenda should be established and maintained.

Recommendation 34: The government should develop new approaches to allow for more timely development and approval of regulations, including exploring broader exemptions from prepublication requirements, improving project planning discipline and developing performance standards for appropriate stages of the regulatory process.

Recommendation 35: The government should improve efficiency, timeliness and predictability, and enhance transparency in the provision of government services. This should include the development of service standards and the use of e-government as a vehicle for single window access to government regulatory programs.

Recommendation 36: The government should establish an ongoing program of evaluation and modernization of existing regulation to ensure that regulation evolves with social needs and scientific advances. A mechanism by which the public can suggest areas of regulation for priority review should be established.

Recommendation 37: The government should establish performance criteria and measures for the regulatory process to ensure the principles and objectives of Smart Regulation are being fostered.

Recommendation 38: The federal government should establish a recourse mechanism independent of the regulatory program to provide an opportunity to stakeholders and citizens to challenge regulatory performance and decisions.

Recommendation 39: Another external advisory committee should be convened in the medium term (e.g. two years) to assess the government’s progress in transforming the regulatory system.

Government Capacity

Recommendation 40: The government must develop and implement a comprehensive learning strategy for the regulatory community.

Recommendation 41: The government should develop and implement regulatory policy research and development agendas in collaboration with appropriate partners from outside the public service.

PART II: SECTORS/AREAS OF REGULATION

Manufacturing and Product Approval

Recommendation 42: The federal government should work with stakeholders and citizens to develop an inventory of regulatory differences, particularly between Canada and the U.S., that impede Canadian competitiveness. They should be examined using the criteria for Canada-specific requirements. If regulations do not meet these criteria, Canada should take immediate action to align its regulatory requirements.

Recommendation 43: A comprehensive Canadian automotive policy framework is required in order to coordinate automotive regulatory roles and develop clear objectives. This framework would also incorporate a strategy of cooperation on standards and joint regulatory development with the U.S.

Recommendation 44: The federal government should further develop its international cooperation framework for the regulation of therapeutics to include short- and long-term objectives and timeframes, and it should proceed quickly with the implementation of this framework to achieve a level of performance reflecting international best practices.

Recommendation 45: The federal government’s short-term efforts should be focused on implementing measures to use data and reviews produced in other jurisdictions when an independent Canadian process does not add to the quality of outcomes. Longer-term efforts should focus on establishing mechanisms to maximize the benefits for Canadians of the knowledge and regulatory capacity developed in other jurisdictions in order to provide timelier access to new therapeutic products.

Recommendation 46: Health Canada and the Department of Justice should explore and recommend, in the context of the renewal of the Food and Drugs Act and other health protection statutes, what immunity might be appropriate to the department and its staff. The recommended approach should be consistent with the protection provided to other leading therapeutic product regulators, including the U.S. Food and Drug Administration and Australia’s Therapeutic Goods Administration.

Biotechnology/Life Sciences

Recommendation 47: The government should make it a priority to develop and implement a comprehensive, government-wide biotechnology regulatory strategy which would:

• identify and address legislative gaps, implement systematic international cooperation, and provide accessible and comprehensive information about regulatory developments;
• identify ways to access and draw from the expertise of the domestic and international scientific communities;
• give due consideration to ethical issues;
• provide opportunities for input from all stakeholders and for citizen engagement;
• be translated into a detailed work plan that measures and reports on progress;
• be reviewed regularly and modified to account for progress in implementation and the rapid changes that characterize biotechnology; and
• assign clear and effective accountability for its strategic leadership and management.

Recommendation 48: The federal government should identify, prioritize and address legislative gaps impacting biotechnology. As a first step, it should accelerate the renewal of health protection legislation. To ensure legislation also continues to be appropriate, it should be monitored via regularly scheduled reviews that are provided for in legislation or in departmental mandates. When appropriate, independent scientific advice and public input should be sought in these reviews.

Recommendation 49: The federal government should be actively and strategically involved in international regulatory cooperation activities impacting biotechnology. It should encourage international and domestic experts to participate in independent peer reviews of studies, risk assessments and regulatory analysis. It should also identify instances where it is in Canada’s interest to be a regulatory leader and actively pursue this objective.

Recommendation 50: The federal government should implement an enhanced communications strategy which would include an accessible Web-based consumer and industry information service similar to the U.K.’s Biotechnology Regulatory Atlas and effectively inform target audiences of its existence and benefits.

Recommendation 51: The federal government should devise and implement a thorough and sophisticated approach to engage citizens and other stakeholders on public policy issues involving biotechnology. This should include the sharing of information on current scientific evidence and risk management analysis.

Enabling First Nations Economic Development

Recommendation 52: The federal government must move quickly to create an efficient, more responsive regulatory environment in First Nations communities, thereby enabling them to realize full economic growth. A key element in designing a successful approach should be to improve cooperative arrangements between First Nations, governments and industry.

Recommendation 53: Working with First Nations, the federal government should accelerate its agenda to introduce new legislation or amend existing legislation as necessary, so that bands have the benefit of a modern regulatory regime in the shortest possible time. In addition, the federal government should move immediately to address regulatory gaps that inhibit the development of commercial and industrial projects on reserve.

Recommendation 54: The federal government should review the full scope of regulatory activity in First Nations communities with a view to reducing the regulatory and administrative burden placed on them. Outdated or duplicative regulations should be eliminated and regulatory gaps addressed. In support of this initiative, the government should put in place a centralized process or mechanism to ensure better coordination and monitoring of regulatory activity in communities.

Recommendation 55: The federal government should accelerate the development of initiatives to improve the skills and capacity of First Nations to make rules and manage regulations. As a key step, the government should give priority to developing the appropriate legislation that would help strengthen the professional skills base in First Nations communities.

The Environmental Assessment Process

Recommendation 56: The federal government should begin discussions with the provincial and territorial governments to develop a nationally integrated environmental assessment process for Canada in which the different jurisdictions would collaborate as partners.

Recommendation 57: The federal government should create a single environmental assessment agency in order to carry out assessments under federal jurisdiction and collaborate with other orders of government.

Recommendation 58: Multiple environmental assessments on the same project conducted by different authorities should be conducted concurrently, not sequentially.

Recommendation 59: The Canadian Environmental Assessment Agency and potential substitute authorities, such as the National Energy Board, should negotiate an agreement to enable substitution when an environmental assessment by a review panel and other project approval processes are both required.

Recommendation 60: Specific targets, performance measures and indicators for monitoring a project’s environmental impacts and the effectiveness of mitigation measures should be considered essential elements of environmental assessments. This approach would incorporate lessons learned from past assessments, post-approval audits and reports on monitoring. These elements need to be developed in consultation with the provinces, territories and other regulators, particularly if a national environmental assessment process is eventually established.

Recommendation 61: The government should conduct public strategic environmental assessments to provide people with an opportunity to discuss overall development issues in the offshore regions or on federal lands, or issues related to a potential new federal policy or policy change.

Recommendation 62: Fisheries and Oceans Canada should accelerate its implementation of planned improvements to its fish habitat system and related involvement in environmental assessment.

Recommendation 63: The Comprehensive Study List Regulations should be evaluated to ensure that the greater complexity of the process (compared with screening) would result in improved environmental protection. Consideration should also be given to modifying the list of projects or altering thresholds where experience has demonstrated that a comprehensive study is warranted because there is a potential for significant adverse environmental effects.

Recommendation 64: Participant funding must be recognized as an essential element of environmental assessment to enable citizens to participate in the assessment process. Guidelines for participant funding should provide clear criteria as to who should receive participant funding in the environmental assessment process and for what purposes.

Recommendation 65: The federal government, in consultation with Aboriginal communities, should provide guidance on how Aboriginal traditional knowledge can be factored into an environmental assessment, while ensuring the balance necessary to maintain viable project timeframes.

Oil and Gas Exploration and Development

Recommendation 66: The government should continue to play a leadership role in building on the shared vision embodied by the Cooperation Plan to create a broader, long-term regulatory cooperation framework among northern regulators that offers timeliness, transparency, predictability, clarity and certainty.

Recommendation 67: The federal government should implement a single window approach to coordinate the involvement of federal regulators in the regulation of industry sectors in the North (e.g. oil and gas, mining), incorporating mandatory timelines for regulatory responses to project submissions to ensure timeliness and certainty.

Recommendation 68: To encourage the efficient regulation of the Mackenzie Gas Pipeline, it is proposed that a federal coordinator be appointed as soon as possible with clear decision-making authority vis-à-vis the various departments and accountability to implement a coherent regulatory environment for the MGP.

Recommendation 69: The federal government should provide training for all new northern regulatory board members as a condition of appointment and as ongoing support. The federal government should also work with similar boards and tribunals across northern Canada to create a network to share best practices and solutions to the challenges facing them.

Recommendation 70: As Fisheries and Oceans Canada proceeds to develop regulations under the Oceans Act, it should ensure that these measures are established in consultation and collaboration with other federal and provincial regulatory authorities, industry, First Nations and other stakeholders. This approach should complement existing regulations governing offshore oil and gas seismic activities.

Recommendation 71: Federal government interaction with the offshore oil and gas industry and other stakeholders should be guided by an overarching regulatory policy framework linking all relevant federal departmental responsibilities.

Recommendation 72: Performance-based regulation should be developed in areas that would enable safety and environmental approaches to be adapted to specific risks as they are encountered, and new technology to be incorporated quickly, while meeting economic, social or environmental regulatory performance expectations.

Recommendation 73: The government should ensure that the multistakeholder Regulatory Advisory Committee studying the policy, which requires comprehensive study assessments of exploratory wells, completes its deliberations and takes appropriate action in a timely manner.