PREFACE

The External Advisory Committee on Smart Regulation was established in May 2003 to provide an external perspective and expert advice on how the federal government needs to redesign its regulatory approach for Canada in the 21st century. A number of factors are increasing the rate of change in the world — global markets and the greater mobility of people and skills, rapid scientific and technological advancements, cross-boundary health and environmental risks, and the growing empowerment of citizens. It is against this backdrop that the Committee examined areas where the federal government needs to improve, expand or possibly redesign its regulatory approach.

The Committee comprises 10 members with extensive experience and diverse backgrounds. Its terms of reference were to:

• develop a regulatory strategy designed for the 21st century, supporting Canada as a sovereign trading nation that offers a high quality of life for its citizens;
• identify sectors and areas requiring regulatory reform in order to give Canada a strategic advantage; and
• review and provide an external perspective on specific issues identified by departments and stakeholders.

The Committee was asked to fulfill its mandate within 12 to 15 months. Given this timeline and limited resources, the Committee decided to focus its work on certain areas over others. For example, it did not address key market framework legislation or areas where an existing review process was already under way, such as the various reviews of securities regulation and the study of cost recovery measures by the Treasury Board Secretariat. The Committee decided not to deal with regulation related to climate change because, at the time the Committee was created, this issue was already the subject of extensive discussions among the federal government, the provinces and territories, the private sector and other stakeholders.

The Committee did not conduct a detailed study of the regulatory burden on business, although it hopes that its recommendations will help in this regard. The Committee acknowledges the recent work of provinces and territories to reduce the burden on small and medium-sized enterprises. It also notes the recent Federal Budget commitment to establish a joint working group on paperwork burden reduction, which will be co-chaired by Industry Canada and an association representing small businesses.

The Committee believes that the issues identified in this report and many of its recommendations are relevant for most sectors of the economy. It recognizes that much of its analysis and therefore many of the examples in this document are related to what the Organisation for Economic Cooperation and Development defines as “social regulation,” in other words, health, safety, environmental and other areas of protective regulation. These are the types of regulations that are expanding the most rapidly and have generated the most criticism and the greatest expectations from citizens. In addition, given the fast pace of developments in the fields of science and technology, social regulation is where many of the regulatory challenges of the future will occur. Considering the potential economic opportunities and social benefits involved, the Committee felt that it would therefore be opportune to focus on social regulation.