Annual Report for the 2020 to 2021 Fiscal Year: Federal Regulatory Management Initiatives

What is cost-benefit analysis?

In the regulatory context, cost-benefit analysis (CBA) is a structured approach to identifying and considering the economic, environmental and social effects of a regulatory proposal. CBA identifies and measures the positive and negative impacts of a regulatory proposal and any feasible alternative options so that decision-makers can determine the best course of action. CBA monetizes, quantifies and qualitatively analyzes the direct and indirect costs and benefits of the regulatory proposal to determine the proposal’s overall benefit.

Since 1986, the Government of Canada has required that a CBA be done for most regulatory proposals in order to assess their potential impact on areas such as:

• the environment
• workers
• businesses
• consumers
• other sectors of society

The results of the CBA are summarized in a Regulatory Impact Analysis Statement (RIAS), which is published with proposed regulations in the Canada Gazette, Part I. The RIAS enables the public to:

• review the analysis
• provide comments to regulators before final consideration by the GIC and subsequent publication of approved final regulations in the Canada Gazette, Part II

Analytical requirements

The analytical requirements for CBA as part of a RIAS are set out in the Policy on Cost‑Benefit Analysis, which was introduced on September 1, 2018, in support of the Cabinet Directive on Regulation. The policy requires both robust analysis and public transparency, including:

• reporting stakeholder consultations on CBA in the RIAS
• making the CBA available publicly

Regulatory proposals are categorized according to their expected level of impact, which is determined by the anticipated cost of the proposal:

• no-cost-impact regulatory proposals: proposals that have no identified costs
• low-cost-impact regulatory proposals: proposals that have annual national costs of less than $1 million
• significant‑cost‑impact regulatory proposals: proposals that have $1 million or more in annual national costs

Table 1 illustrates how these categories are determined based on total annual costs or present value over 10 years.

The level of impact determines the degree of analysis and assessment that is required for a given regulatory proposal. This proportionate approach is consistent with regulatory best practices set out by the Organisation for Economic Co-operation and Development (OECD). Table 2 shows the analysis required for each level of impact.

In this report, information on CBA covers GIC regulations only and is limited to regulatory proposals that have a significant cost impact; since these proposals require that the majority of benefits and costs be monetized, the overall net impact can be described in economic terms more clearly than proposals with low or no costs, which rely more on qualitative or quantified analysis.

Figures in this report are taken from the RIASs for regulations published in the Canada Gazette, Part II, in the 2020–21 fiscal year. To remove the effect of inflation, figures are expressed in 2012 dollars and, therefore, will vary from those published in the RIASs. This approach permits meaningful and consistent comparison of figures, regardless of the year in which regulatory impacts were originally measured.

Overview of benefits and costs of regulations

In the 2020–21 fiscal year, a total of 305 regulations were published in the Canada Gazette, Part II, compared with 324 in the 2019–20 fiscal year. Of these 305 regulations:

• 187 were GIC regulations (61.3% of all regulations)
• 118 were non-GIC regulations (38.7% of all regulations)

Of the 187 GIC regulations (compared with 184 in the 2019–20 fiscal year):

• 145 had no cost impact or low-cost impact (77.5% of GIC regulations and 47.5% of all regulations)
• 42 had significant cost impact (22.5% of GIC regulations)

Figure 1 provides an overview of regulations approved and published in the 2020–21 fiscal year.

Figure 1 - Text version

Figure 1 provides an overview of the regulations published in the 2020-21 fiscal year.

During this period, 118 non-Governor in Council regulations were published, and 187 Governor in Council regulations were published.

Of the 187 Governor in Council regulations, 145 were no-cost-impact or low-cost-impact regulations, and 42 were significant-cost-impact regulations.

Of the 42 significant-cost-impact regulations, 14 included monetized costs and benefits, 10 included monetized costs only, and 18 did not include monetized costs or benefits.

Qualitative benefits and costs

The most basic element of any analysis of costs and benefits is a description of the expected impacts of the regulatory proposal. This description is based on a qualitative analysis and is used to:

• provide decision-makers with an evidence-based understanding of the anticipated impacts of the regulation
• provide context for further analysis that is expressed in numerical or monetary terms

Qualitative analysis should be part of the CBA of all regulatory proposals, including those that have no cost impact or low-cost impact.

The following are examples of qualitative impacts identified in significant‑cost‑impact regulations in the 2020–21 fiscal year:

• The Regulations Amending the Immigration and Refugee Protection Regulations (Emergencies Act and Quarantine Act) (SOR/2020‑091) control and prevent the spread of COVID‑19 within Canada by ensuring that foreign nationals and employers of temporary foreign workers comply with measures that protect public health. The regulations provide benefits and protections to temporary foreign workers by requiring the payment of wages during the initial quarantine or isolation period upon entry to Canada, and by introducing new requirements pertaining to their accommodations.
• The Certain Goods Remission Order (COVID‑19) (SOR/2020‑101) waives customs duties on imports of medical supplies, including personal protective equipment (PPE). This waiver benefits Canadian essential service providers such as food-processing facilities, grocery stores, and pharmacies that are importing PPE and are not covered by any other COVID tariff relief measures.
• The Work Place Harassment and Violence Prevention Regulations (SOR/2020‑130) streamline the harassment and violence provisions for federally regulated workplaces that fall under Part II of the Canada Labour Code. Research and expert analysis suggest that the changes will benefit workers by reducing occurrences of harassment and violence in the workplace, which in turn will generate wide-ranging benefits such as reduced absenteeism, job burnout, disability payments, lost work time and litigation costs. These measures foster a collaborative work environment and a psychologically healthier and more motivated workforce, resulting in increased labour productivity.

Quantitative benefits and costs

Quantitative benefits and costs are those that are expressed as a quantity, for example:

• the number of recipients of a benefit
• the percentage reduction in pollution
• the amount of time saved

As is the case with qualitative information, quantitative benefits and costs can be used in two ways:

• on their own, they can illustrate the expected magnitude of a proposal by providing measurable figures to decision-makers
• they can be used as a factor in developing cost estimates

Quantitative analysis is an element of nearly all regulatory proposals that have a significant cost impact. Such analysis provides key metrics on the frequency or number of instances of an activity and is essential for estimating benefits and costs. Quantitative analysis can also be used on its own to illustrate the overall impact of a proposal in non-monetary terms. Although quantitative analysis is not required for proposals that have no cost impact or low-cost impact, it is often included alongside qualitative information because it can be useful to decision-makers.

The following are examples of quantified benefits and costs identified in significant‑cost‑impact regulations that were finalized in the 2020–21 fiscal year:

• The Regulations Amending the Metal and Diamond Mining Effluent Regulations (SOR/2020‑108) designate 21 water bodies (44.96 hectares) frequented by fish for the disposal of mine waste generated by the Magino Mine Project near Wawa, Ontario. To offset the loss of fish habitat, the project proponent (Prodigy Gold Inc.) is required to implement a fish habitat compensation plan that will result in a direct gain of 47.25 hectares of fish habitat of equivalent or superior quality compared with fish habitat that the disposal of mine waste will destroy.
• The Reduction in the Release of Volatile Organic Compounds Regulations (Petroleum Sector) (SOR/2020-231) reduce fugitive releases of volatile organic compounds (VOCs) from equipment leaks at petroleum refineries and upgraders, and at petrochemical facilities that are operated in an integrated way with these facilities. Reducing VOC releases improves air quality by reducing primary precursors of smog. Overall, the amendment will reduce fugitive VOC releases by approximately 90 kilotonnes and greenhouse gas emissions by 120 kilotonnes of carbon dioxide equivalent (CO2e) for the years 2021 to 2037.
• Given that many students faced reduced savings and loss of income due to the COVID‑19 pandemic, the Regulations Amending the Canada Student Financial Assistance Regulations (SOR/2020‑144) provided additional non-repayable grants and access to additional loans for new or returning post-secondary education students for the school year beginning in fall 2020. The regulatory amendments are in effect for one loan year (August 1, 2020, to July 31, 2021), and the nominal total cost of the regulatory amendments is $1.84 billion over three years, with the benefits to Canadians expected to outweigh the costs.

Monetized benefits and costs

Monetized benefits and costs are those that are expressed in a currency amount, such as dollars, using an approach that considers both the value of an impact and when it occurs.^{Footnote 3}

An analysis of monetized costs and benefits is required for all regulatory proposals that have a significant cost impact. If the benefits or costs cannot be monetized, a rigorous qualitative analysis of the costs or benefits of the proposed regulation is required, and the Treasury Board of Canada Secretariat (TBS) must be satisfied that there are legitimate obstacles to monetizing the impacts. In practice, most regulatory proposals with significant cost impacts include both monetized benefits and costs as part of the analysis.

In order for costs and benefits to be considered monetized, the dollar values used in a CBA are adjusted so that values and prices that occur at different times are equal:

• to their exchange value (inflation adjustment)
• when they occur (discounting)

Several proposals that were part of the government’s response to COVID‑19 were developed using modified analytical requirements. In the case of CBA, proposals identifying significant costs could state impacts qualitatively instead of monetizing them. As a result, the figures stated for this fiscal year are lower than would be expected in a typical year.

Of the 42 regulations with significant cost impacts that were finalized in the 2020–21 fiscal year, 24 of them had monetized impacts, representing 12.8% of GIC regulations. Of the 42 regulations:

• 14 had monetized benefits and costs
• 10 had monetized costs only
• 18 did not include monetized costs or benefits; of these, 15 were related to COVID‑19 and featured modified analytical requirements

For the 14 regulations with significant cost impacts that had monetized estimates of both benefits and costs, expressed as total present value (see Figure 2): ^{Footnote 4}

• total benefits were $9,158,732,536
• total costs were $8,266,420,468
• net benefits were $892,312,068

Figure 2 - Text version

Figure 2 depicts the benefits and costs of significant-cost-impact regulations published in the 2020-21 fiscal year.

The benefits associated with significant-cost-impact regulations totalled $9.16 billion.

The costs associated with significant-cost-impact regulations totalled $8.27 billion.

The difference between the benefits and the costs is a net benefit of $892 million.

The following three significant‑cost‑impact regulatory proposals had the greatest net benefit of all proposals that were finalized in the 2020–21 fiscal year and that had monetized benefits and costs:

• The Regulations Amending the Canadian Aviation Regulations (Parts I and X — Offsetting of CO2 Emissions — CORSIA) (SOR/2020‑275) require private operators or air operators who fly internationally to offset their portion of global greenhouse gas emissions that exceed 2020 levels from the international aviation sector. This offset is done by using CORSIA Eligible Fuels or acquiring and cancelling emissions units on the international carbon market. These changes are expected to result in a net benefit of $370,791,265 between 2021 and 2035.
• The Canada Recovery Benefits Regulations (SOR/2021‑35) increase the maximum number of weeks of benefits entitlement under the Canada Recovery Benefit and the Canada Recovery Caregiving Benefit to 38 weeks, and increase the maximum number of weeks of benefits entitlement under the Canada Recovery Sickness Benefit to four weeks. In addition, the Regulations Amending the Canada Labour Standards Regulations (SOR/2021‑36) extend the maximum length of leave related to COVID‑19 to align with changes to these programs. The net benefit of these changes is $271,293,285 over two years (2021–22 and 2022–23).
• The Navigation Safety Regulations (SOR/2020‑216) repeal nine existing regulations related to navigation safety and radiocommunication and consolidate them into one new regulation. The new regulation also transfers requirements relating to navigation safety from a 10th existing regulation, the Steering Appliances and Equipment Regulations. The new regulation will expand the carriage requirements of navigation safety and radiocommunication equipment to a wider category of vessels, which will enhance marine safety in terms of collision avoidance and search and rescue effort. The regulation also aligns Canada’s regulations with amendments to Chapters IV and V of the SOLAS Convention, allowing Canada to meet its international commitments, supporting harmonization efforts with other jurisdictions, and creating a clearer and simpler set of regulatory requirements while improving safety. The new regulation will also update terminology and clarify wording in regulatory requirements. In total, the changes will result in a net benefit of $104,250,368 between 2020 and 2031. 

The purpose of CBA is to determine whether the expected benefits of a proposal are greater than the expected costs. This determination, however, is not based entirely on monetized benefits and costs. CBAs frequently include quantitative and qualitative analysis, in addition to monetized analysis, and the overall analysis must consider this broader range of evidence. In the 2020–21 fiscal year:

• three regulations that had a significant cost impact had monetized costs that were equal to monetized benefits, a result that is usually associated with a direct transfer from one party to another
• two regulations that had a significant cost impact had monetized costs that were greater than monetized benefits, which typically indicates that some benefits, such as broader societal benefits, could not be monetized and were stated qualitatively alongside benefits that were monetized

For detailed benefits and costs by regulation, see Appendix A.

The one-for-one rule

To comply with the annual reporting requirements of the Red Tape Reduction Act, this report also provides an update on the implementation of the one-for-one rule.

The one-for-one rule, which was instituted in the 2012–13 fiscal year, seeks to control the administrative burden that regulations impose on businesses.

Administrative burden includes:

• planning, collecting, processing and reporting of information
• completing forms
• retaining data required by the federal government to comply with a regulation

Under the rule, when a new or amended regulation increases the administrative burden on businesses, the cost of this burden must be offset through other regulatory changes. The rule also requires that an existing regulation be repealed each time a new regulation imposes new administrative burden on business.

The rule applies to all regulatory changes made or approved by the GIC or a minister that impose new administrative burden on business. It covers regulations with low cost impacts and those with significant cost impacts. Under the Red Tape Reduction Regulations, the Treasury Board can exempt three categories of regulations from the requirement to offset burden and regulatory titles:

1. regulations related to tax or tax administration
2. regulations where there is no discretion regarding what is to be included in the regulation (for example, treaty obligations or the implementation of a court decision)
3. regulations made in response to emergency, unique or exceptional circumstances, including where compliance with the rule would compromise the Canadian economy, public health or safety

Regulators are required to monetize and report on:

• the change in administrative burden
• feedback from stakeholders and Canadians on regulators’ estimates of administrative burden costs or savings to business
• the number of regulations created or removed

As with CBA, the dollar values used in estimating administrative burden are adjusted so that values and prices that occur at different times are equal in their exchange value (inflation adjustment) and when they occur (discounting). In this report, all figures related to the one‑for‑one rule are expressed in 2012 dollars to permit meaningful and consistent comparison of regulations, regardless of the fiscal year in which they were introduced.

In 2015, the Red Tape Reduction Act enshrined the existing policy requirement for the one‑for‑one rule in law. Section 9 of the Red Tape Reduction Act requires that the President of the Treasury Board prepare and make public an annual report on the application of the rule.

The Red Tape Reduction Regulations state that the following must be included in the annual report:

• a summary of the increases and decreases in the cost of administrative burden that results from regulatory changes that are made in accordance with section 5 of the act within the 12‑month period ending on March 31 of the year in which the report is made public
• the number of regulations that are amended or repealed as a result of regulatory changes that are made in accordance with section 5 of the act within that 12‑month period

Key findings on the implementation of the one-for-one rule

The main findings on changes in administrative burden and the overall number of regulations for the 2020–21 fiscal year are as follows:

• system-wide, the federal government remains in compliance with the requirement in the Red Tape Reduction Act to offset administrative burden and titles within 24 months
• annual net administrative burden decreased by $2,053,606 in the 2020–21 fiscal year; since the 2012–13 fiscal year, annual net burden has been reduced by approximately $60.5 million
• 31 regulatory titles (net) were taken off the books, with a total net reduction of 185 titles since the 2012–13 fiscal year

A detailed report on regulations that had implications under the one-for-one rule is in Appendix B.

Under the one-for-one rule, regulatory changes in the 2020–21 fiscal year resulted in the following increases and decreases in the cost of administrative burden on businesses:

• $896,795 of new burden introduced
• $2,950,401 of existing burden removed
• net decrease of $2,053,606

The rule allows individual portfolios two years to offset any new burden introduced. As well, portfolios are allowed to bank burden reductions for future offsets within that portfolio. As a result, most of the $896,795 in new burden introduced in the 2020–21 fiscal year has already been offset:

• $736,235 of new burden was offset immediately by previously removed burden
• $160,560 of new burden had not yet been offset as of March 31, 2021

The changes introduced by the following three final regulations represented the largest changes in administrative burden in the 2020‒21 fiscal year:

• The Order Declaring that the Provisions of the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) Do Not Apply in Alberta (SOR/2020‑233) reduces regulatory overlap and reporting burden by allowing Alberta to achieve equivalent methane emission reductions in the oil and gas sector in a manner that best suits its particular circumstances. Oil and gas facilities in Alberta will no longer need to comply with the administrative requirements associated with the federal regulations, resulting in average annualized cost savings of $1,305,206.
• The Regulations Amending the Food and Drug Regulations and the Medical Devices Regulations (Post-market Surveillance of Medical Devices) (SOR/2020‑262) introduce new summary reports and issue-related analysis of safety and effectiveness that will impose an administrative burden on industry. However, the changes reduce the existing reporting requirements to a list of specified events related to foreign risk notification. Overall, the amendment results in a net reduction of $531,971 per year in administrative burden on business.
• The Order Declaring that the Provisions of the Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) Do Not Apply in Saskatchewan (SOR/2020‑234) reduces regulatory overlap and reporting burden by allowing Saskatchewan to achieve equivalent methane emission reductions in the oil and gas sector in a manner that best suits its particular circumstances. Oil and gas facilities in Saskatchewan will no longer need to comply with the administrative requirements associated with the federal regulations, resulting in average annualized cost savings of $386,793.

Under the one-for-one rule, regulatory changes in the 2020–21 fiscal year resulted in the following increases and decreases in the stock of federal regulations:

• 6 new regulatory titles imposing administrative burden on business were introduced
• 27 regulatory titles were repealed
• 13 existing titles were repealed and replaced with 3 new titles

While nine new titles were introduced over the course of the year, the rule allows individual portfolios two years to offset these titles. As is the case with administrative burden, portfolios are allowed to bank title repeals for future offsets within the portfolio. As a result, all of these nine new titles have already been offset:

• seven were offset immediately by previously removed titles
• two were offset by subsequent repeals in 2020–21.

The Treasury Board monitors regulators’ compliance with the requirement to offset new administrative burden and titles. System-wide, the federal government remains in compliance with the requirement in the Red Tape Reduction Act to offset new administrative burden and titles within 24 months.

TBS also tracks offsetting requirements by portfolio. As of March 31, 2021, Fisheries and Oceans Canada had an outstanding amount of $24,101 of burden that had exceeded the 24‑month period for offsetting; this situation has been reported in previous annual reports.

Of this outstanding balance, $23,190 relates to the Aquaculture Activities Regulations (SOR/2015-177), which were registered on June 29, 2015. The regulation introduced $409,513 in administrative burden on business, of which the department offset $151,761 prior to 2020–21. A further $234,562 was offset in 2020–21 by the Regulations Amending Certain Regulations Made Under the Fisheries Act (SOR/2020‑255).

During the 2020–21 fiscal year, two further Fisheries and Oceans Canada regulations surpassed the 24‑month period for offsetting burden:

• the Regulations Amending the Marine Mammal Regulations (SOR/2018-126) were registered on June 21, 2018, and introduced $738 in new burden
• the Banc-des-Américains Marine Protected Area Regulations (SOR/2019-50) were registered on February 24, 2019, and introduced $173 in new burden

Officials from TBS and from Fisheries and Oceans Canada continue to work together to identify opportunities to offset these outstanding amounts.

In the 2020–21 fiscal year, the Treasury Board approved the exemption of 16 regulations from the requirement to offset burden and titles:

• one was related to tax and tax administration
• four were related to non-discretionary obligations
• 11 were related to emergency, unique or exceptional circumstances

The total number of exemptions in 2020–21 is comparable to previous years. However, the number of exemptions related to emergency, unique or exceptional circumstances is proportionately higher since proposals related to COVID‑19 typically cited “emergency circumstances” to justify exemption.

Figure 3 - Text version

Figure 3 provides an overview of the implementation of the one-for-one rule for regulations published in the 2020-21 fiscal year.

There were 9 new regulations added and 40 regulations repealed, resulting in 31 fewer regulations in the regulatory stock.

There were 16 exemptions to the one-for-one rule, including 1 exemption for tax or tax administration, 4 non-discretionary obligations, and 11 emergency, unique or exceptional circumstances.

In total, 15 regulations increased burden by $896,795, and 16 regulations decreased burden by $2,950,401, for a net decrease of $2,053,606 in administrative burden costs.

In April 2020, the Government of Canada initiated a legislated review of the Red Tape Reduction Act to identify ways to further reduce unnecessary administrative burden on businesses and identify potential improvements to benefit the Canadian economy. 

TBS undertook broad public consultations in 2019 on the Red Tape Reduction Act and other initiatives related to regulatory modernization. The resulting report, What We Heard: Report on Regulatory Modernization was posted online in November 2020 summarizing the key themes raised by stakeholders. 

The Administrative Burden Baseline

The Administrative Burden Baseline (ABB) provides Canadians with a count of the total number of administrative requirements on businesses in federal regulations (GIC and non-GIC) and associated forms.

For the purposes of the ABB, an administrative requirement is a compulsion, obligation, demand or prohibition placed on a business, its activities or its operations through a GIC or non-GIC regulation. A requirement may also be thought of as any obligation that a business must satisfy to avoid penalties or delays. Regulatory requirements generally use directive words or phrases such as “shall,” “must,” and “is to,” and the ABB counts these references in the regulatory text or other documents.

The ABB was first publicly reported on in September 2014, providing a baseline count of administrative requirements by regulator. Since then, regulators continue to:

• do a count of their administrative requirements occurring from July 1 to June 30 each year
• publicly post updates to their ABB count by September 30 each year

Key findings on the Administrative Burden Baseline

The baseline provides Canadians with information on 39 regulators that are responsible for GIC and non-GIC regulations that contain administrative requirements on business.

As of June 30, 2020:

• the total number of administrative requirements was 137,089, an increase of 4,606 (or 3.48%) from the 2019 count of 132,483
• there were 599 regulations identified by regulators as having administrative requirements, an increase of 13 (or 2.22%) from the 2019 figure of 586
• the average number of administrative requirements per regulation was 228.9, an increase of 2.8 (or 1.2%) from the 2019 average of 226.1

The top three changes in the ABB in 2020 were:

• Health Canada’s count increased by 3,563 (16,495 to 20,058), primarily as a result of the legalization and regulation of new classes of cannabis products and the addition of new reporting requirements as part of the Cannabis Tracking System Order. The modernization and harmonization of the licensing and permitting scheme in regulations under the Controlled Drugs and Substances Act, as well as the new regulations under the Assisted Human Reproduction Act, also resulted in an increase in the 2020 count. In addition, the department’s response to address the COVID‑19 pandemic contributed to the increase.
• Changes to Canadian Food Inspection Agency (CFIA) regulations, directives and forms resulted in an overall net increase of approximately 309 requirements (5,154 to 5,463). Two regulations administered and enforced by the CFIA were amended or repealed, 10 incorporated directives were modified, existing forms were updated, and new forms were introduced to collect data to enable evidence-based decision-making.
• Environment and Climate Change Canada’s count increased by 263 requirements (12,542 to 12,805), primarily in relation to the introduction of the Output-Based Pricing Regulations (SOR/2019-266).

A detailed summary of the ABB count for 2020 and for previous years can be found in Appendix C.

Strengthening transparency and participation in the regulatory system 

Proposed regulations and Regulatory Impact Analysis Statements are published in the Canada Gazette, Part I, to solicit stakeholder feedback. Traditionally stakeholders have provided their feedback by mail or email, and their comments are summarized in a “What We Heard” report and taken into account in the development of the final regulation. Canadian stakeholders and trade partners have called for enhanced transparency of regulatory consultations, including the proactive release of public comments on regulatory proposals. As committed in the Canada-United States-Mexico Agreement (CUSMA), a new commenting feature will allow stakeholders to review proposed regulations and submit their comments directly on the Canada Gazette, Part I, web page. Beyond the increased ease for stakeholders to comment on draft regulations, this tool will also result in greater transparency for stakeholder comments.

This initiative works alongside others that promote transparency and participation in the regulatory system. Other initiatives include the requirement for regulators to post online their plans to update or develop new regulations as well as their plans for reviews of existing regulations.

The External Advisory Committee on Regulatory Competitiveness (EACRC) brings together business, academic and consumer representatives to provide an independent perspective on regulatory barriers facing businesses. It was formed to help ministers and regulators modernize Canada’s regulatory system into one that protects health, security, safety, and the environment while promoting economic growth and innovation. At the end of March 2021, the first EACRC completed its mandate. Added to its earlier advice, their last recommendations were summarized in two letters to the President of the Treasury Board in:

• Recommendation Letter (January 2021)
• Recommendation Letter (March 2021)

Improving regulatory efficiency through cross-border cooperation 

Regulatory cooperation is one of many tools that the government uses to improve efficiency and competitiveness in the regulatory system. Federal regulators cooperate with regulators across borders to: 

• reduce unnecessary regulatory differences
• eliminate duplicative requirements and processes 
• harmonize or align regulations
• share information and experiences
• foster innovation and collaboration 
• adopt international standards

Additionally, the federal government has advanced 40 reconciliation items through three formal regulatory cooperation forums: 

• 17 workplans through the Canada-United States Regulatory Cooperation Council established in 2011
• 5 workplans through the Canada-European Union Regulatory Cooperation Forum, established in 2018 under the Canada-European Union Comprehensive Economic Trade Agreement
• 18 workplan items through the Regulatory Reconciliation and Cooperation Table, established in 2017 between the federal government and all provinces and territories under the Canadian Free Trade Agreement.

Through these forums, regulators identify opportunities for cooperation and commit to workplans that advance their cooperation goals. Workplans are kept up to date online at Canada’s regulatory cooperation web page.

Reducing barriers to economic growth and innovation 

Coordinated by TBS in partnership with federal departments and agencies, and in close consultation with stakeholders, targeted Regulatory Reviews examine existing regulations and related practices to address issues that impact economic growth and competitiveness without compromising health, safety, security and the environment. In addition, the Regulatory Reviews identify new ways to support regulatory innovation. For example, the reviews could identify pilot projects, opportunities to test innovative technologies using experiments or sandboxes, and opportunities to co-develop regulations with stakeholders. 

Key features of the Regulatory Review process are transparency and responsiveness to stakeholders. Departments and agencies that participate in a Regulatory Review develop publicly available Regulatory Roadmaps that lay out a plan of action to address the issues identified by stakeholders along with associated timelines, where possible. Departments and agencies also contribute to consolidated Progress Reports for the Treasury Board and publish annual public updates online. To date, there have been two rounds of targeted Regulatory Reviews that have resulted in six Regulatory Roadmaps:

Across the six Regulatory Roadmaps, over 100 concrete actions have been identified to support regulatory modernization. These actions include bringing forward 17 new regulatory packages to update regulations and the identification of over 15 novel regulatory approaches. Incremental funding was provided in Budgets 2019 and 2021 to implement several Roadmap actions.

Review Roadmaps can be found online at the Targeted Regulatory Reviews web page.

Strengthening capacity to experiment and innovate

Regulatory experiments, such as regulatory sandboxes and pilot projects, involve testing new technologies and different regulatory approaches. These experiments help identify what works and what doesn’t, building evidence that regulators can use to create and administer effective regulatory regimes. This process helps industry bring innovative products and services into the marketplace, ultimately improving regulatory outcomes for Canadians.

The Centre for Regulatory Innovation (CRI) provides tools, advice and funding to help federal regulators experiment and innovate. Its activities include supporting new ways of working with industry to ensure that regulations are responsive to complex, rapidly evolving technological and business environments.

Enabling the modernization of regulations through legislative change

Outdated regulatory frameworks are sometimes the result of out-of-date or overly rigid legislation. For example, outdated rules can block a regulator from adopting a new approach or technology, such as requiring a hand-signed documents instead of allowing a digital signature. Tools such as the Annual Regulatory Modernization Bill (ARMB) change legislation to remove irritants that add no value and impede modernization.