Government Operations Committee on March 10th, 2020

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll now go to five-minute questions.

Mr. Aboultaif, you're up for five.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Good morning. First of all, thank you for coming this morning before our committee.

I have a few brief questions. The first question is, are we buried in regulations in Canada?

[James van Raalte]

I think that's a qualitative question. As I said in my opening comments, on the stock, on the federal books of regulations are about 3,000 sets of regulations that go all the way from protecting the health and safety of Canadians to the administration of the Employment Insurance Act and all the way to protecting wildlife and to facilitating the economy. Also, not all sets of regulations are created the same. The EI regulations are probably quite thick and quite dense. The regulations that support the Red Tape Reduction Act are quite slim.

I don't know what the assessment would be for whether we are buried in regulations. I think we have a balanced framework, and we're working to modernize it.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Based on the results, what we are saving is too small. The reduction is too small. Are you aware of other jurisdictions for us to compare this with in terms of how well we are doing?

[James van Raalte]

I think it's certainly an opinion that can be formed by this committee about whether the reductions are too small or too large. The act is performing in the way that the act was designed. A government put forward a piece of legislation. It was debated within Parliament. It was passed.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I got my answer. Thank you.

Basically, it's not an administrative problem. It's a structural problem in the way we do things and in the way we basically push regulations onto industry. Is that correct?

[James van Raalte]

I think I would answer the question in the following way.

We know, as my colleague said, that regulators regulate. That's what they do. That's what their business is. Our regulations and our regulatory framework are solid. We do recognize there are challenges in the “how”. On the “what”, the regulations are solid. They're reviewed; they're vetted, and there's an opportunity to comment on those regulations.

Where we see anecdotally that we run into challenges is in how departments implement those regulations through guidance, through processes and through perhaps a lack of predictability and a lack of clarity. If you have a moment to sit down with organizations and talk through the problems or the burden they're facing, it's less and less about the what. It's less and less about the regulations, and more and more about the how.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Do we regulate where we shouldn't? Is there a motion right there that we regulate where we should not?

[James van Raalte]

I think that's a question for decision-makers. I don't think that's a question for policy guidance. The Treasury Board regulates based on the best advice, and those are decisions taken by a cabinet committee.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I have a question for Mr. Loyst.

From life experience, we know that from the science and technology of medical instruments and so forth there seems to be a lot of focus on health. We know that physicians must wait years to have access to instruments that are typically available in other countries. If a product is made in Germany and we need to adapt it, we still have to put it under our regulations although we're buying it from Germany and we have really nothing to do with its design and effectiveness.

What could Health Canada do to improve the medical and pharmaceutical regulatory regimes? Could foreign approvals be enough for us in order to adapt instead of going through the process from scratch all over again? Knowing that the United States and the European Union are our allies and partners and that we do respect their regulatory regimes and their design and basic technologies, I'd like you to shed light on this area, because it seems to take a lot of attention in cost reduction as we move on this.

[The Chair, Conservative, Tom Lukiwski]

Before I move on, I'm going to give members my favourite intervention, which I do frequently for many new members of this committee, and that is to inform the committee members that the five-minute allocation we've given is for both the question and the answer. Since we're completely out of time, we're going to have to move on.

We will now go to Mrs. Block for five minutes, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much—

[The Chair, Conservative, Tom Lukiwski]

Oh, I'm sorry.

Majid, I'm sorry. My most abject apologies.

[Majid Jowhari, Liberal, Richmond Hill, ON]

That's the second time, Mr. Chair. I'm getting a feeling that there is something going on.

[Voices]

Oh, oh!

[The Chair, Conservative, Tom Lukiwski]

I know you think that I've been ignoring you all your life, but it's not true.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair, and welcome to our witnesses.

I'm going to pick up where Julie left off. Based on the 2015 Statistics Canada business register, in Canada we have about 1.2 million businesses registered. About 98% of them are small businesses of between one and 99 people. About 2% are medium and about 0.3% are large.

You've indicated that we have about 3,000 regulatory packages. Is there any data available that you could formally submit to the committee around how many of these regulatory packages are hitting the small businesses and in what industry sector those are focused? If you have that readily available, I would love to have it. If not, is it possible for us to get that data?

[James van Raalte]

I regret that I do not have that information readily available. It would be very difficult for us to break that down. I'll give you a little bit of an example.

Different ministries touch different industries in different ways with their regulations. An example I was given yesterday was that of a small business, a photographer, and how regulations might hit a photographer. They want to grow their business by taking pictures from high vantage points. They can go up to a tall building and they can take pictures down on the ground, or they can use a drone, and then you're getting into regulations about a drone. Different businesses will butt up against regulations in different ways. It all depends on whether and how they are conducting their business—

[Majid Jowhari, Liberal, Richmond Hill, ON]

The reason I'm asking is that when I talk to a lot of small businesses in my riding of Richmond Hill, one of their areas of concern is that the cost of some of these regulatory procedures, these regulations that they have to follow, is actually impeding them from being able to grow. I'm trying to get an understanding of where these cost burdens are coming from.

A lot of them are also saying that because they're small businesses they don't have the capacity to follow up on these—whether the capacity is the number of people or the knowledge—and it therefore falls through the cracks. Do you have any feedback on that?

[James van Raalte]

I think a growing preoccupation of both businesses and government is this concept of cumulative burden. We recognize, as I started to walk through, that the Government of Canada has set some regulations that may interact with each other and pose a burden on one business or one industry. Then you have to layer on the fact that there are provincial regulations and guidance. Also, across the country, even municipalities have authorities in terms of regulatory powers or bylaws that put costs....

[Majid Jowhari, Liberal, Richmond Hill, ON]

When we're talking about the one-to-one and trying to go to one-to-two and sometimes one-to-three, how many of these regulations...? During our review process, have we been successful in simplifying this, by eliminating three regulations and having one? If you're telling me that now we are getting into a lot more complex world, then how is the one-to-one and moving to one-to-two and one-to-three working now?

[James van Raalte]

I would say that administrative burden is but one piece of the puzzle in terms of addressing that burden issue for businesses in Canada. The one-for-one rule is very narrow about administrative burden and reducing that administrative burden on companies through federal regulations.

Cumulative burden goes much beyond administrative burden. It is potentially one piece of that calculation, and there is no known methodology. This is an emerging issue for governments and for businesses, and I believe it to be an important issue. It's going to take us a bit of time to work through cumulative burden.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We will go to Mrs. Block for five minutes.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

Thank you, as well, for being here with us today.

I do recall when the right hon. David Cameron came and spoke in the House of Commons and actually raised the issue of the one-for-one rule that they had implemented in their Parliament. I think that, if it was something that we had been considering, it probably further motivated us to take a closer look at doing this. I'm sure that's why back in 2011 we launched the Red Tape Reduction Commission to start looking at this.

Mr. Van Raalte, I want to go through some of the comments you made in your opening remarks and ask some questions that came out of those. You stated that when new administrative costs are introduced, departments have two years to offset the costs with other changes and to remove a regulation from across a minister's portfolio. Could you tell us where and/or how that is tracked?

[James van Raalte]

We track that at the Treasury Board of Canada Secretariat. There is a unit within our organization. All regulatory submissions come in through the regulatory affairs sector at Treasury Board. The challenge function is exerted in terms of instrument choice, relevancy and cost-benefit analysis, and part of that challenge function is about the administration of the act and the one-for-one rule.

Under the legislation, the president is then required to report annually on the performance. We collect that data, track it, monitor it and then report on it.