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External Advisory Committee on Smart Regulation (EACSR)

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The Regulatory Process: Enabling Smart Regulation

The world is changing and in this evolving environment, Canada needs a regulatory system that responds quickly and effectively to the challenges of rapid scientific and technological change, and emerging opportunities and risk in global markets.

The vision of the External Advisory Committee is for governments, citizens and businesses to work together to build a national regulatory system that enables Canadians to take advantage of new knowledge and supports Canada's participation in an international economy. This vision has three components:

Trust: the regulatory system must instil trust, confidence, and credibility at home and abroad in Canadian products and services, markets and government institutions.

Innovation: the regulatory system must enhance market performance and enable innovation, competitiveness, entrepreneurship and investment in the Canadian economy.

Protection: the regulatory system must demonstrate to citizens that the public interest, such as human health and safety and the protection of the environment, will be safeguarded within dynamic global markets.

The External Advisory Committee would like to hear the views of stakeholders – businesses, other governments, non-governmental groups, not-for-profit organizations, consumers, government officials and citizens in general – about process related problems and, most importantly, about solutions to those problems. New ideas are welcome, as are thoughts that will give the Committee a better understanding of where it must go from here. (A longer and more detailed version of this paper with more "technical" consultation questions is available from this web site. Stakeholders are welcome to respond to either paper, as they see fit.)

Tell Us How Canada Can Regulate Smarter!

The current federal regulatory system is governed by a number of government policies, cabinet directives and laws. Chief among these is the Federal Regulatory Policy, which establishes process, analytical, and over-riding substantive policy requirements for regulators and government decision-makers.

The current regulatory management system can be improved. There are weaknesses in both the system itself and in areas where performance improvement is needed and possible. This is an open-ended invitation to help the Committee learn more so that it can give sound, practical advice to the Government. The Committee has already identified a number of problem areas that it believes need careful examination and it specifically invites your input on these issues:

Delays and the timeliness of regulation: What can the government do to ensure that regulation is more timely and responsive? How can we judge if the time required to develop a regulation was too short, too long, or just right?

Transparency and accountability: What could be done to ensure that the process for making regulations is clear and understandable to everybody and what could be done to ensure that affected parties be able to keep track of the status of specific regulatory proposals? What mechanisms could be established to ensure that the government clearly communicates the policy objectives being pursued by regulatory proposals and the rationales for regulatory action taken? How can the government improve the clarity and accessibility of legislation and regulations? What mechanisms could be used by the government to monitor the manner in which it implements, administers and enforces regulations?

Consultation fatigue and failures: How can the government ensure that stakeholders are provided with meaningful opportunities to participate in regulatory consultations and, at the same time, minimize the risk of "consultation fatigue"? What could the government do to facilitate multi-stakeholder communications and collective learning in our consultations? How can we assess the quality of the government's consultation activities and ensure that there is continuous improvement?

Scope of the regulatory management system: The current regulatory management system focuses on regulations (subordinate legislation) and does not apply to primary legislation (statutes) or to other forms of rules, such as directives or guidelines.   What can the government do to "target" regulatory process requirements more effectively so that we pay better attention to the important initiatives and don't waste time and money on the things that will have low impact?

Problem identification: Understanding "the problem" - what's causing it, how bad it really is, and where it is headed - is an essential first step in deciding whether and how to regulate. How can the government improve its ability to identify and assess both the risks and opportunities that may be addressed through regulatory intervention? How can the government involve you to deepen its understanding of "the problems" and their implications for Canadian society? How can government improve its communication of risk issues?

Choosing the Right Mix of Instruments: Regulation is only one among several ways that government can try to deal with problems. But regulatory action is sometimes favoured by the public, by politicians, and even by business which may recognize the need for action, but wants a "level playing field". What can we do both within and outside the government to make the full array of governing instruments more accessible and attractive for public policy decision-makers? How should the government involve actors from outside government when using different instruments? How can we fashion laws that accommodate flexible ways to comply with regulatory specifications?

Quality of the analysis: A full-blown analysis of the impacts of regulation is costly, time-consuming, and suited to only the most significant regulations. But decision-makers and stakeholders need to know what regulation will do. Are we really looking at the right things in our existing impact analyses? Would you like to see such matters as environmental sustainability, effects on trade, competitive dynamics, and differential impacts on small business included? If we strengthen the analytical requirements, should we also focus them more? How?

Information for stakeholders and communication: The government publishes information about regulations in Regulatory Impact Analysis Statements (RIAS) published in the Canada Gazette after a regulation has been approved for pre-publication. RIASs can be lengthy and publishing them in the Canada Gazette can be very costly to departments. Does this process requirement still make sense? Are there better ways to improve the lines of communication- in both directions and at earlier stages of the regulatory process?

Review of regulation: Although efforts have been made to reduce the flow of new regulation, there is also an enormous stock of existing regulation. Some of it might be obsolete and some if it clearly needs to be updated so that it meets current needs. But, it takes a lot of resources, both inside and outside the government, to carry out rigorous reviews of existing requirements and the stock of regulation just keeps getting larger and larger. Should the government establish a system that requires systematic, periodic review of all existing regulation or should it rather target the reviews? How? Can you suggest any innovative ways for stakeholders and the public to advise the government when they believe regulation is outdated, ineffective or inefficient or has unintended or unfair impacts? How can the government get rid of obsolete regulations?

Administration and Enforcement: For many businesses and citizens, direct experience with government regulation is more likely to arise from administration or enforcement activities, not from engagement in the rule-making process. How should people be treated if they become involved in this aspect of regulation? How should regulatory officials decide what strategies to adopt and what measures to employ to secure compliance with the law? How can national consistency be ensured?

Capacity: Does the government have what it needs to "regulate smarter"? Does it have the right people, with the right skills and experience, and the right information?  How can the government ensure that its people stay at the leading edge of knowledge? Does it have enough capacity to do the job properly and ensure fair and consistent administration of the law? If not, what should it do to develop and sustain this capacity?

How Do We Measure Performance?

Government officials, like their business counterparts, must be able to monitor their performance. Performance information has to be meaningful, timely, and reliable. And, when the performance indicators seem headed in the wrong direction, the government needs to know what to do to get things back on track

Areas for discussion:

The Committee wants to know what performance criteria and indicators should be used to measure whether the regulatory system is working properly.

What criteria would you consider most important for tracking performance of the regulatory management system?

Can you suggest any specific indicators (i.e., things the government could measure) that could be used for those criteria?

The ultimate objective of the regulatory system, of course, is to produce better quality regulation, that is, regulation that meets its objectives with minimal burden on stakeholders. This, too, has to be assessed and adjustments made in either specific regulatory regimes or in the regulatory management system generally if we are not getting what we wanted or expected.  Things change - we need to pay attention.

What criteria would you propose for assessing the impact, in the real world, of regulatory intervention?

What strategies should we adopt for monitoring regulatory impacts on a dynamic basis?

Last Modified:  9/22/2004

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