PART III

MAKING IT HAPPEN

The Committee recognizes that the scope of its report is large and that the recommendations it proposes are ambitious. The Committee often heard that the problem with the regulatory system is not one big issue but many little issues, which make the system daunting for those who have to understand and comply with it. These kinds of issues call for change at the strategic, organizational and cultural levels. They have important implications for departments, which must find new and different ways to achieve their missions.

Such a transformation will not happen without strong political leadership at the most senior levels. The federal public service will need clear direction and support from the government to implement these changes. The government must be accountable for setting a course of action and the public service for implementing it promptly. The responsibility is upon parliamentarians, provincial and territorial governments, industry and businesses, non-governmental organizations and interested citizens to work together with the federal government and take an active part in the transformation of the regulatory system. A willingness to share issues, an open mind to listen to other perspectives, and a commitment to finding solutions in the interest of all Canadians and the future of the country are preconditions without which the proposed changes will not happen. This is why the Committee has insisted on cooperation as a key theme of its report.

During the course of its mandate, the Committee often heard that one of the biggest challenges to Smart Regulation would be its sustained implementation and translation into new departmental practices. One of the key issues with the current regulatory policy is that it has yet to be fully or consistently implemented by departments and agencies. The main barriers to its implementation include the following: the lack of recognition of the importance of regulation by ministers and parliamentarians; the lack of attention regulation gets relative to spending and taxation measures; the resistance to change within individual departments; and the lack of accountability and related mechanisms with respect to the application of, and compliance with, the regulatory policy.

Indeed, during the Committee’s consultations, many people questioned the federal government’s willingness and ability to implement the kind of changes proposed by the Committee. Federal officials showed interest in and support for its work. Even so, the Committee feels that it is necessary to bring this issue to the attention of government and that this third part of its report should be dedicated to the issue of implementation. The nine initiatives in this section constitute a short-term action plan to be initiated and implemented within the next 18 months, to the greatest extent possible. This short-term plan is intended to “kick start” the government’s implementation of Smart Regulation.

At present, there is a great deal of interest across the country in transforming the regulatory system. The Committee has witnessed — and hopes that it has contributed to developing — considerable momentum behind regulatory reform. There is an opportunity therefore to take action and develop a system that will be consistent with the values and aspirations of all Canadians and will ensure that Canada is well positioned in the future to take advantage of opportunities and offer its citizens a continued high quality of life.

These changes will not happen overnight. The agenda put forward by the Committee will take a few years to implement, but it is important to start now. The Committee therefore proposes the following immediate actions to drive the successful implementation of Smart Regulation.

1. Transitioning to Smart Regulation – The government should commit to making all new regulation “smart.” In the short term, one way to achieve this (until the regulatory process has been modified and a new policy is developed) is to ask departments and agencies to add a section to the Regulatory Impact Analysis Statement to demonstrate how the proposed regulation is consistent with a Smart Regulation approach. This will require direction and leadership from the Privy Council Office. Over the longer term, the way PCO exercises its challenge function should be strengthened. PCO should lead and manage a federal regulatory agenda to enable effective priority setting and support departments in implementing Smart Regulation.

2. Developing a regulatory policy for the 21st century – The government should develop a new federal regulatory policy by September 2005 embodying the vision and principles as well as the directions proposed by the Committee.

3. Supporting a learning regulatory community – The quality of the regulatory system, and the success in changing approaches, lies in better supporting and developing the skills, competencies and capacity of the people who work in regulatory programs and areas. An essential initial step in effecting a regulatory “cultural change” is to implement a Smart Regulation learning strategy for the regulatory community. Such a strategy would include the sharing of best practices, mobility across departments, orientation courses and a system to disseminate knowledge across regulatory departments and agencies.

4. Developing multistakeholder “swat teams” – Based on the principle of cooperation and on the recommendation to review the current stock of regulation, “swat teams” for industry sectors should be established to help lead regulatory reform processes. In addition to the relevant federal departments, these teams would include representatives from industry, provincial/territorial governments, Aboriginal organizations, non-governmental organizations, Canadian scientists from universities or centres of excellence and others as appropriate. Their objective would be to make recommendations to ensure that regulation affecting an industry sector is “smart.” Swat team members should be committed to the protection and enabling principles of Smart Regulation and participate in a spirit of cooperation to develop common solutions. They should also commit to dedicate the time and effort necessary to implement the recommendations.

The swat teams would be given a six-month term of reference to do the following:

• identify regulatory issues that can and should be addressed immediately;
• identify issues with a broader scope that will require other departments and stakeholders to resolve them (e.g. the Competition Act and intellectual property issues); and
• develop work plans for more complex, long-term issues.

5. Simplifying the environmental assessment process – The Minister of the Environment should initiate discussions immediately with the provinces and territories to explore the possibility of creating a national approach for environmental assessments. The situation should be assessed by June 2005. Should there be no interest from provincial and territorial governments or if progress is too slow, the federal government should create a single federal environmental assessment agency and implement other measures to improve the environmental assessment process.

6. Improving federal-provincial-territorial cooperation – Addressing coordination issues between orders of government is an essential step in developing more coherent regulatory approaches in Canada. Developing a cooperative Smart Regulation approach should be identified as an agenda item for a forthcoming First Ministers’ meeting. Environmental assessments should be a priority for discussion.

7. Addressing regulatory gaps in First Nations communities – The government should move quickly to address regulatory gaps (e.g. in the areas of health, safety, and environmental protection and enforcement) that inhibit the development of commercial and industrial projects and other economic activity on reserve lands. The government should commit to provide First Nations communities with the appropriate regulatory framework to launch economic development projects within the next 12 months.

8. Reducing small regulatory differences between Canada and the U.S. – The Committee has highlighted the myriad small differences between Canadian and American regulations as an important issue and recommends that they be reduced or eliminated. The federal government should take immediate steps in this regard. A designated minister should invite interested stakeholders to identify, by the end of December 2004, those regulatory differences for which elimination would not impede Canadian social (including health and safety) and environmental objectives. Each should be examined against the set of criteria for specific Canadian requirements proposed by the Committee. By June 2005, recommendations should be made to the relevant ministers, who should take steps to immediately implement the recommendations.

9. Enhancing access to the federal government –The federal government should establish mechanisms in the next six months to provide an opportunity to stakeholders and citizens to challenge regulatory performance and decisions. The authority given to such mechanisms could include mediation, investigation, convening public hearings and making recommendations.

To complement these actions, the Committee recommends that the government develop and implement a strategy to broadly promote Canada’s commitment to Smart Regulation. As progress is achieved, it should be communicated within Canada to encourage stakeholders’ commitment and reinforce the need for their cooperation to continuously improve the regulatory system. This would help to ensure that the regulatory community’s work is recognized and that it takes pride in its successes. Opportunities outside Canada should be identified to make sure that potential foreign investors and consumers of Canadian products trust the Canadian regulatory system and perceive it in a positive light.

Parliamentarians have an essential role in the regulatory process in terms of representing the interests of Canadians and providing leadership on regulatory directions for the future. Parliamentarians should be engaged in redefining relationships within a Smart Regulation system.

Finally, it will be important for the government to monitor and report to citizens regularly on progress in the implementation of Smart Regulation.

EXTERNAL ADVISORY COMMITTEE ON SMART REGULATION

We, the Members of the External Advisory Committee on Smart Regulation, are pleased to present this report and believe that the realization of its vision will benefit Canadians in the 21st century.

Mr. Gaëtan Lussier, Chair

Ms. Rita Burak

Mr. Bernd S. Christmas

Dr. Robert B. Church

Mr. Richard Drouin

Mr. Scott H. Jacobs

Ms. Louise Rozon

Mr. David Runnalls

Mr. Raymond I. Woods

Mr. Robert J. Wright, C.M., Q.C.