Recommendation Letter (March 2021)

The COVID opportunity

The pandemic created an opportunity for regulators to think and behave differently. If leveraged properly, this could be the catalyst for changes needed to accelerate the drive to regulatory excellence. COVID-19 highlighted the importance of collaboration across economic sectors, researchers, governments, and the public. This collaboration was crucial in developing solutions to address challenges presented. We encourage government to continue to work collaboratively as we move forward.

In our last letter, we recommended that the government bring together a small group within government to capture the best of the regulatory flexibilities provided during the pandemic and focus on institutionalizing changes that can contribute to Canada’s regulatory excellence. We continue to recommend seizing the opportunities presented by the COVID-19 pandemic to make the regulatory system more flexible and responsive without compromising rigour or credibility as a regulator. For example, are there broader applications for the rolling submission approach that allowed vaccines to be approved in record time without making compromises on safety? What new insights do we have around supply chains that may change the way we approach regulation?

Treasury Board should continue to encourage a balanced common-sense approach to regulatory management and examine whether there are system-wide measures that could be adapted to facilitate implementation of flexible, outcomes-focused approaches to regulating. We also believe each department should take the opportunity to do its own review and leverage the lessons learned from the pandemic to move closer to regulatory excellence. These learnings should be shared broadly for cross-sectorial and departmental best practices, particularly as it relates to innovative approaches and risk mitigation practices.

One important positive change has been increased outreach. Regulators and those they are regulating have both commented on how helpful this more frequent communication has been. We recommend that regular communication, including early outreach on policy before it becomes a regulatory proposal, be strongly encouraged and considered a best practice across government. Further, departments should work together where policy and regulatory changes in one area will have broader implications for those being regulated; thinking in terms of ecosystems rather than silos is a more modern and effective approach to regulating.^{Footnote 2}

We recommend that departments take a whole-of-government approach to consultations to help with the challenges faced by groups who do not have the capacity to engage in multiple consultations that seem misaligned.^{Footnote 3} A consultation calendar would enable industry and consumer groups more ability to plan and manage resources in order to provide better input, which supports better outcomes.

Round three regulatory reviews

The last outstanding area of our mandate where we were asked to provide advice is the third round of regulatory reviews.

We suggest the third round of regulatory reviews build on the lessons learned from the pandemic to advance regulatory excellence.^{Footnote 4} Specifically, we recommend the government focus on:

1. capturing and institutionalizing improvements to regulatory agility that were a result of the pandemic^{Footnote 5}
2. reflecting and taking action to improve on challenges in the system highlighted by COVID-19 that remain problematic post-pandemic^{Footnote 6}
3. doubling-down on digital innovation (the subject of an existing review)

In the pandemic lessons, it may be helpful to reach out more broadly to consumers, businesses, and other groups through a survey to ensure that their perspectives on pandemic lessons are included.

Looking ahead

We reiterate that our most important advice is that the government find ways to enhance and accelerate progress towards regulatory excellence and modernization. Our concern is that the recommendations we have made will not be enough to sustain the culture and institutional change needed. Will we be another in a long list of committees that worked hard on its recommendations only to later witness the same problem languishing or getting worse? How do we create a continued sense of urgency that encompasses all of government in modernizing Canada’s regulatory system to benefit Canadians? Something is not working in the system when an issue as important as this continues to be raised so regularly and urgently by businesses of all sizes in Canada and consumers continue to feel they are not included in important decisions that affect them.

Modernizing Canada’s regulatory system and striving for excellence requires a sustained wholistic approach that coordinates actions across government and provides ongoing mechanisms for research and analysis of innovation and pragmatic approaches. We offer the following suggestions for your consideration.

Every department and agency has a role to play in working towards regulatory excellence. We urge departments to become very proactive in this space and that the need to work towards regulatory excellence be highlighted in ministerial mandate letters. It is an opportune time to make a strong statement coming off the new agility and flexibility required to deal with COVID-19.

To help support regulatory agility across government, we recommend strengthening the capacity of the Centre for Regulatory Innovation to achieve its important mandates: regulatory experimentation to promote innovation, and supporting industry in bringing new technologies into the Canadian marketplace. (See more details in the appendix on this recommendation.)

We also recommend a strengthened advisory committee: one with greater capacity to provide outside advice to government on developing world-leading regulatory systems that support innovation and competitiveness; support Canadian prosperity; and achieve better health, safety, and environmental outcomes (regulatory excellence). We need a regulatory system that supports and enhances Canada’s unique economy and position in the world. The government’s Advisory Council on Growth and the Economic Strategy tables both recommended the creation of an effective advisory council on regulatory agility and innovation as a top priority.^{Footnote 7}

The functions that such a committee can cover include:

• providing informed advice to government that drives regulatory excellence and supports innovation, including:
  • encouraging a systems-based approach to regulating that cuts across silos and brings together different departments and actors, inside and outside of government
  • creating a place for government to “report back” on progress with regulatory reviews and other recommendations made about regulatory excellence^{Footnote 8}
  • helping prioritize regulatory modernization initiatives and commenting on specific topics (such as regulatory measurement and use of AI)
  • being a place where departments and Treasury Board can come to for independent advice
  • building and consolidating expertise (in Canada) on world-leading approaches for achieving regulatory excellence and accelerating innovation
• advising and supporting the Centre for Regulatory Innovation on regulatory experimentation
• building trust between government and citizens around regulatory modernization by being a credible, independent group outside of government that provides guidance

Without being too prescriptive, we recommend that such a committee be adequately resourced and sufficiently independent to offer bold, objective advice, and sufficiently connected to government to ensure that its advice is well informed by practical realities. This committee should have sufficient budget to conduct independent research and analysis and its own secretariat.

We recognize this may take time to consider and structure. In the meantime, it may be helpful to appoint an interim committee such as this one with some new members, while retaining some of the current members for continuity and to maintain momentum.

Final thoughts

As we conclude our work together, we reflect how valuable it has been to have such a diverse group of voices around the table. We hope we have lived up to our promise to deliver advice that is bold and pragmatic. We want to thank those who took time out of their busy schedules to present to us and help further our thinking. We also want to thank your officials at Treasury Board of Canada Secretariat who have done an incredible job supporting us. Their dedication is commendable, and we felt a true spirit of partnership as we worked through our advice and recommendations.

Finally, success in positioning Canada as a leader in regulatory excellence requires strong leadership across government. We want to thank you and Minister Murray, your predecessor in working with our committee, for being strong leaders. We want to impress upon you and your colleagues across government the importance of championing regulatory excellence as the country turns its attention to recovery and beyond.

Sincerely,

Laura Jones
Chair, External Advisory Committee on Regulatory Competitiveness

Executive Vice-President and Chief Strategic Officer Canadian Federation of Independent Business

On behalf of committee members:

Dr. Catherine Beaudry
Professor and Canada Research Chair in Creation, Development and the Commercialization of Innovation Polytechnique Montréal

Stewart Elgie
Professor of Law and Economics and Executive Chair of the Smart Prosperity Institute University of Ottawa

Ginny Flood
Retired Suncor Energy Inc. executive and current Chair, Board of Directors for Clean Resource Innovation Network

Anne Fowlie
CEO of AgWise Strategic Solutions
Fruit and Vegetable Dispute Resolution Corporation

Don Mercer
President
Consumers Council of Canada

Keith Mussar
Vice-President of Regulatory Affairs
I.E. Canada, Canadian Association of Importers and Exporters

Nancy Olewiler
Professor and Director of the School of Public Policy
Simon Fraser University

Views expressed by committee members are their own, not the views of the organizations they are affiliated with.

APPENDIX: Recommendations and further thoughts from recent meetings