A Guide to the Regulatory Process

The Government of Canada Regulatory Policy

The key policy governing regulation in Canada is the Cabinet Directive on Streamlining Regulation (CDSR) that came into effect on April 1, 2007. The CDSR, which introduces a “lifecycle” approach to regulation, provides guidance on managing the implementation of regulations, evaluating their performance, and reviewing regulatory frameworks. The Regulatory Affairs Sector (TBS-RAS) is responsible for providing advice and guidance with the development and implementation of the CDSR.

The objective of the Cabinet Directive is to ensure that use of the government's regulatory power results in the greatest net benefit to Canadian society. The integrity of this objective is upheld mainly through the Regulatory Impact Analysis Statement (RIAS) as well as the consultative process.

The CDSR applies to federal departments and agencies with regulatory authority. For example, within a department's legislation, a Minister may be granted legislative authority to make regulations in certain areas.

Canadians view health, safety, the quality of the environment, and economic and social well being as important concerns. Ensuring that government funds are spent wisely is in the public interest. The government will weigh the benefits of making regulations against their cost, and focus resources where they can do the most good.

To these ends, the federal government is committed to working in partnership with industry, labour, interest groups, professional organizations, other governments and citizens, and will maintain its responsibility to serve the public interest.

The Regulatory Process

The approval process for regulations is governed by the Statutory Instruments Act (SIA). The following describes briefly what departments and ministers are required to do before a regulation is brought into force. For more information, readers are invited to contact the TBS-RAS at 613-943-5076 or via e-mail at publicenquiries-demandesderenseignement@tbs-sct.gc.ca.

The Statutory Instruments Act defines a regulation as a statutory instrument made in the exercise of a legislative power conferred by or under an Act of Parliament, or for the contravention of which a penalty, fine or imprisonment is prescribed by or under an Act of Parliament.

This definition of a regulation includes a rule, order, or regulation governing proceedings before a judicial or quasi-judicial body established by an Act of Parliament, and any instrument described as a regulation in any other Act of Parliament.

The regulatory process applies to proposals for regulations as defined in subsection 2(1) of the Statutory Instruments Act and to proposals for other statutory instruments that are registered under the statutory orders and regulations (SOR) designation and published in the Canada Gazette, Part II.

Regulations are a form of law, often referred to as delegated or subordinate legislation. They have the same binding legal effect as Acts. The involvement of departments in regulatory matters or issues depends on the mandate of the department. Many pieces of legislation have regulations attached to them and each year a significant number of new or amended regulations are brought into force.

The regulatory process is mandatory for all proposals that fit these definitions and that are made or approved by the Governor in Council or by a Minister, though there are differences in the process for Ministerial Regulations compared to Governor in Council or Treasury Board Regulations, as the former receive final approval from the designated Minister instead of the Governor in Council.

There are three broad classes of regulations:

Governor in Council (GIC) Regulations	Regulations requiring the authorization of the Governor General on the advice of the Queen's Privy Council (currently represented by the Treasury Board Ministers).
Ministerial Regulations	Where an Act gives an individual Minister the authority to make regulations.
GIC or Ministerial Regulations requiring Treasury Board approval	Regulations require approval from the Treasury Board (TB) when there are financial implications or when a department's enabling act requires Treasury Board recommendation to the Governor in Council.

Applying the Regulatory Process

The regulatory process applies to most regulations, as defined in the Statutory Instruments Act. Some regulations are not subject to the regulatory process. They are wholly or partially exempted by their enabling Act or by the Statutory Instruments Regulations.

The main steps in developing a Governor in Council regulation are as follows:

Step 1 - Planning

Departments must review their regulatory proposals to ensure that they are necessary and that non-regulatory means or instruments are not better suited to address the issue identified. This stage also includes determining the level of impact (Triage Framework).

Step 2 - Analysis

Departments conduct analysis and develop the regulatory impact analysis statement (RIAS) that includes a description of the proposal, alternatives considered, a benefit-cost analysis, results of consultations with stakeholders, compliance and enforcement mechanisms. They obtain approval of the RIAS from TBS-RAS.

Step 3 - Drafting

The department or agency drafts the regulatory proposal, with the assistance of its legal advisors and the Department of Justice Legislative Counsel.

Step 4 - Review by Justice

The department sends the proposed regulation and supporting documentation to the Department of Justice Legislative Counsel for review. Once everything is in order, the proposed regulations are stamped and return to the department.

Step 5 - Sign-off by Sponsoring Minister

The proposed regulation package is signed-off by the sponsoring Minister. By signing the documents, the Minister formally recommends prepublication or exemption from prepublication and final approval. The department sends the submission to PCO-OIC.

In cases where regulations require Treasury Board recommendation to the Governor in Council, the department will send a submission to TBS.

Step 6 - First Review by TBS-RAS

TBS-RAS will review for consistency with the CDSR and other government initiatives; review the supporting documents; and prepare a briefing note for consideration by TB.

Step 7 - Request to TB for Pre-publication

The first time that a regulatory proposal is seen by TB, the sponsoring Minister is seeking approval for prepublication in the Canada Gazette, Part I. The Minister may however seek exemption from prepublication, or a shorter publication period. TB considers the proposal and either approves or rejects the request.

Prepublication allows for public scrutiny and comment on the proposal, generally for a period of 30 days or 75 for regulations with an impact on international trade. It is expected that the department will address public comments in a revised regulation, or provide reasons why a given concern could not be addressed.

Step 8 - Updating the Regulatory Proposal

Comments obtained during prepublication may require changes to the regulatory proposal. The regulations submitted for final approval also require stamping by the Department of Justice.

If the proposal does not require changes, the RIAS is revised to include a description of the comments received during prepublication and the department's response. The sponsoring Minister must then sign the submission and recommend the item for final approval and publication in Part II of the Canada Gazette.

Step 9 - Second Review by TBS-RAS

TBS-RAS reviews the revised regulatory submission after pre-publication and the department's response to the comments and prepares a briefing for consideration by TB.

Step 10 - TB Recommendation for GIC Approval

TB Ministers make the decision to recommend approval of the regulatory proposal by the GIC.

If approved

1. the Governor General makes the regulation by signing it; and
2. the regulation is subsequently registered with the Registrar of Statutory Instruments.

Note: Regulations normally come into force as soon as they are registered, which must occur within seven days of final approval. Publication must occur within 23 days of registration.

If not approved

The sponsoring department must decide:

1. to modify the initiative and go back to the beginning of the approval process; or
2. abandon the initiative entirely

Step 11 - Review by Standing Joint Committee for the Scrutiny of Regulations

The Standing Joint Committee for the Scrutiny of Regulations is a parliamentary committee that reviews all regulations. It can recommend changes to regulations. It also reports to Parliament on problems, and can propose that regulations be repealed via a disallowance motion.

Roles and Responsibilities of the Treasury Board Cabinet Committee

The TB, which is one of the Cabinet Committees, is divided into two Parts (A and B).

Part B provides advice to the Governor General on the regulatory agenda of the government.