Applying the Federal Cabinet Directive on Streamlining Regulation

Regulatory Craft in Nova Scotia Conference 2007Halifax, Nova ScotiaNovember 20, 2007

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The Federal Regulatory Reform Imperative

• Regulation has a major impact on economic and social well-being – but it is not treated as strategically as other instruments, like government spending

• Recognizing the growing importance of a sound regulatory framework, the Government of Canada announced three initiatives in 2007 Budget:

– Paper Burden Reduction Initiative (Industry Canada)

– Major Projects Management Office (Natural Resources Canada)

– Cabinet Directive on Streamlining Regulation (TBS)

Protecting citizens, consumers and the natural environment is a more demanding task in the 21st century. Business must perform more efficiently and be more

innovative in a highly integrated international economy.– External Advisory Committee on Smart Regulation

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Implementing regulatory reform policies and building capacity: The Cabinet Directive

• The Cabinet Directive is the result of collaboration between federal regulatory departments and agencies as well as thorough consultations with a wide cross-section of stakeholders including environmental and consumer groups, industry and small business, and provinces and territories.

• Also took into account the recommendations that came out of the 2002 OECD review of the Canadian federal regulatory system. Those recommendations focused on:

– Moving towards a lifecycle approach that includes evaluation;– Improving coordination within Canada;– Paying greater attention to market openness and competition.

• The Cabinet Directive came into effect on April 1, 2007 and applies to all federal departments and agencies involved in federal regulatory process.

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Strengthening regulatory management

• In the next year, Canadians will begin to see new regulations that offer high levels of protection while being easier to comply with, aligned with key trading partners, and supported by timely and transparent approval processes.

The Directive supports a performance-based regulatory system through: Features Examples of Results

Quantitative cost-benefit Occupational Health and Safety Regulations to protect employee health and improve productivity Costs = $84M, Benefits = $205M

Domestic & int’l cooperation Organic Food Regulation cooperation with U.S:possible $1.2B net benefits (exports +

economic)Business impact analysis Pulp & Paper Regulations:

$7M business savings from reduced admin. burden

Performance measurement Human Transplantation Regulations:Two-stage evaluation plan after first and

fifth years to drive continuous improvement

Regulatory Governance Centre of Regulatory Expertise drives the culture change to create a performance-based regulatory system

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Improving Analysis

• Cabinet Directive requires departments/agencies to improve analysis and understanding by focusing attention and resources on issues such as:– Identifying the nature of the problem or policy issue– Setting public policy objectives for government action– Considering the views of stakeholders and Canadians – Selecting the appropriate mix of regulatory tools– Understanding trade, investment and competitiveness impacts– Demonstrating impacts on the economy, environment and

society– Minimizing the burden on business– Measuring performance and evaluating/reviewing regulation

• Treasury Board Secretariat working with federal departments and agencies to ensure that the principles of the Directive are reflected in each regulatory proposal.

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Treasury Board Secretariat: An enabling role…

• This shift towards a performance-based regulatory system represents a significant change for federal departments

• To support departments in meeting the new requirements and to promote the necessary culture change, Cabinet approved an Action Plan with the CDSR to implement initiatives such as:

– A Centre of Regulatory Expertise to provide expert support on high-impact proposals;

– A new curriculum for regulators developed by the Canada School of Public Service;

– A new series of guides for regulators on topics such as cost-benefit analysis, consultation, instrument choice and international cooperation.

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and a challenge function

• Treasury Board Ministers responsible for approving federal regulations.

• Treasury Board Secretariat provides a challenge function in departmental regulatory process:– Earlier engagement in regulatory process.

– Ensures complete analysis undertaken for new regulations.

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Key Issues Moving Forward

• Recent Speech from the Throne highlighted several issues with important regulatory implications, including:

– Focus on food and product safety (Health Canada lead)• Risk-based approach;• International standards;• Commitment to reporting on performance.

– Integrated Northern Strategy (Indian and Northern Affairs lead)• Shared nature of regulatory systems requires full participation and

collaboration of Aboriginal groups, territorial governments and stakeholders.

• Focus on increased system predictability and efficiency.• Committed to periodic reviews of progress—continuous improvement.• Objective is to promote economic development and ensure

environmental sustainability.

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Key Issues Moving Forward (2)

– Clean Air Agenda (Environment Canada lead)• Implement a national strategy to reduce Canada’s total GHG

emissions 60 to 70 percent by 2050: – 20 percent reduction by 2020– Institute binding national regulations on GHG emissions

across all major industrial sectors• Cost-benefit analyses are high priority.• Sector-specific approach means that negative business

impacts will be minimized.• Need to avoid jurisdictional duplication (equivalency

agreements).• Emphasis on innovation (particularly technology

development).

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Next Steps

• Significant work over the next several years:

– New analytical tools to improve understanding of impacts during regulatory development.

– Performance framework to measure and report on effectiveness of regulations.

– 5 year evaluation of the Cabinet Directive.

New regulatory paradigm Not just protecting from the worst, but enabling the best

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