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The 2012–2013 Scorecard Report: Implementing the Red Tape Reduction Action Plan

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2. Federal Regulatory Management in Canada

“A robust and effective regulatory system provides consistency, fairness, and transparency, and supports innovation, productivity, and competition.”

- The Cabinet Directive on Regulatory Management

2.1 The role of federal regulation in Canada

The Government of Canada uses regulation as a key policy instrument to enable economic activity and protect the health, safety, security, and environment of Canadians.

Regulations are a form of law. They have a binding legal effect and set out rules that usually apply generally, rather than to specific persons or situations. Regulations are made by persons or bodies to which Parliament has delegated authority, such as the Governor in Council (GIC), See footnote [2] a minister, or an administrative agency.

An effective and streamlined regulatory system contributes significantly to a competitive and resilient economy. For example, in the economic sector, regulation establishes the rules for fair markets, reduces barriers to trade through alignment with trading partners, clarifies conditions for the use of new products, services, and technologies, and fosters new investment.

Despite the importance of regulation to maintaining a fair and competitive economy, Canadians and businesses from across the country have identified a number of regulatory irritants that add unnecessary delays, costs and bureaucracy. This has a direct and negative impact on their bottom lines. Cutting regulatory red tape and reducing barriers in the regulatory system will therefore free up businesses to expand and create jobs, while cementing Canada’s reputation as one of the best places in the world to do business.

2.2 The Cabinet Directive on Regulatory Management

The Cabinet Directive on Regulatory Management (CDRM), which came into effect on April 1, 2012, applies to all federal departments, agencies, and entities (herein referred to as “regulators”) over which Cabinet has either general or specific regulation-making authority.

The CDRM requires that the Government, when regulating, adheres to the following principles:

  • to protect and advance the public interest;
  • to advance the efficiency and effectiveness of regulation;
  • to make decisions based on evidence;
  • to promote a fair and competitive market economy;
  • to monitor and control the administrative burden of regulation;
  • to create accessible, understandable and responsive regulation; and
  • to require timeliness, policy coherence and minimal duplication throughout the regulatory process.

“Red tape is like death by a thousand paper cuts. It’s a cost that leaves hundreds of thousands of small business owners frustrated. Every hour spent dealing with red tape is an hour not spent serving a customer or training an employee.  It has a huge impact on all Canadians.”

Laura Jones, Senior Vice-President, Canadian Federation of Independent Business, Times and Transcript, January 14, 2012

2.3 The Government of Canada’s regulatory reform agenda

In January 2011, Prime Minister Stephen Harper launched the Red Tape Reduction Commission. The Commission was asked to identify irritants to business stemming from federal regulation and make specific and system-wide recommendations on how to reduce the regulatory burden.

The Commission canvassed business representatives from across the country with an emphasis on identifying regulatory irritants that have a clear detrimental effect on growth, competitiveness and innovation, particularly from a small business perspective. Through these consultations, business representatives voiced frustration over duplicative regulatory requirements, high administrative costs and a lack of a customer-service orientation within government in providing regulatory services.

Overall, business representatives felt that regulators have a poor understanding of industry realities and need to pay greater attention to timeliness, predictability and accountability.

Following the release of the Commission’s "What Was Heard" Report in September 2011, its Recommendations Report was released in January 2012. The Report outlined several “systemic” recommendations to address the root causes of regulatory red tape and 90 additional department-specific recommendations to reduce or eliminate regulatory irritants.

The Red Tape Reduction Action Plan, released in October 2012, is the Government’s response to the Commission's recommendations. The Action Plan underscores the Government’s commitment to breaking down barriers to doing business in Canada and building the foundations of long term prosperity.

The Action Plan details a package of fundamental, government-wide regulatory reforms that the Government is implementing to address the Commission’s “systemic” recommendations. These systemic reforms are:

  • The One-for-One Rule, which targets and strictly controls the growth of administrative burden on business imposed by regulation. More information on the Rule can be found in Chapter 3.
  • The Small Business Lens, which requires that regulators take into account the needs and realities of small business when they design or change regulations. More information on the Lens can be found in Chapter 4.
  • Forward regulatory plans, which provide Canadians and businesses with an early warning of regulatory changes affecting them over a 24-month period. More information on these plans can be found in Chapter 5.
  • Service standards for high-volume regulatory authorizations, which drive accountability for service improvement, particularly for those authorizations and processes that impact business. More information on service standards can be found in Chapter 6.
  • Interpretation policies, which provide clarity on how regulators interpret their regulations and when they can be counted on to give answers in writing to questions or concerns from stakeholders. Interpretation policies are under development and will be publicly-released later this year.
  • An Administrative Burden Baseline initiative, through which regulators will develop and maintain an inventory of requirements in regulation that impose administrative burden on business, thereby providing additional assurance of the Government’s commitment to monitoring and reporting on regulatory red tape. Once established, these inventories will help regulators manage their stock of regulatory requirements. Regulators will release their initial inventories of regulatory requirements by fall 2014, to be updated annually thereafter.

In addition, the Action Plan accepts all of the Commission’s 90 department-specific recommendations, the vast majority of which will be implemented by the applicable regulator(s) by the end of 2015–2016.

2.4 A transparent and accountable approach to reform implementation

The commitment to transparency and accountability is central to the implementation of the systemic regulatory reforms. For example, details on how the One-for-One Rule and the Small Business Lens have been applied to regulations are publicly available through the Canada Gazette. Furthermore, in spring 2013 regulators created 36 new Acts and Regulations Web pages. Although not called for in the Action Plan, these standardized Web pages are intended to make regulatory information easier to find and provide a more consistent user experience for Canadians and businesses. These Web pages also showcase a regulator’s forward regulatory plan, service standards for high-volume regulatory authorizations and other regulatory red tape reduction efforts.

The publication of an Annual Scorecard Report on the implementation of the systemic reforms further underscores the Government’s commitment to transparency and accountability. This edition of the Scorecard represents the Government’s first opportunity to report publicly on the overall results achieved so far.

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