Government Operations Committee on March 10th, 2020

[Kelly McCauley, Conservative, Edmonton West, AB]

Can I interrupt? You mentioned B.C. Does it require legislative change, or can we move to a two-for-one or three-for-one reduction on our own as a policy? You mentioned that, before the legislation came in, the department was already working on a similar model. Can we go ahead with more aggressive red tape reduction?

[James van Raalte]

Could I ask for a little clarity on the question?

[Kelly McCauley, Conservative, Edmonton West, AB]

Sure. B.C. has a two-for-one reduction; ours is a one-for-one. Can we move ahead with a two-for-one reduction? What's holding us back from being more aggressive with red tape reduction?

[James van Raalte]

Nothing is holding us back. It depends on a question of emphasis. The government has adopted a number of measures that are well under way in terms of looking at issues around red tape reduction and administrative burden.

My colleague from Health Canada pointed out the regulatory reviews, which in round one have looked at issues around health and health sciences: for example, in terms of looking across health regulations, not just one set of regulations and not just in one department, in terms of building that road map to modernizing the regulatory—

[Kelly McCauley, Conservative, Edmonton West, AB]

What's stopping us from going ahead and being more aggressive? Again, B.C. has a two-for-one reduction.

I was looking at the numbers provided by our library, and since 2012 the actual dollars saved are pretty minimal.

In terms of a benchmark, I look at the States, where their Office of Information and Regulatory Affairs says it has cut $33 billion in the last three years. Now, not every one of those regulatory cuts is perfect, and it's a larger country, 10 times the size economy-wise, but that's still $33 billion cut in three years, whereas I think our analysts are showing that our regulatory cuts have added an economic burden to our businesses.

Therefore, what is stopping us from being more aggressive? Is it political will? You mentioned a lack of emphasis. Is that an emphasis required by the political body? Is it lack of emphasis within the department itself, or a lack of power given to your department?

[James van Raalte]

From a policy perspective, in looking at what other countries have done, a number of countries were ahead of Canada in terms of introducing a one-for-one rule. Some of them went to a two-for-one rule. In Britain, they actually went for a three-for-one rule and then have subsequently rolled those back or eliminated them.

It's a question of a balancing act of looking at the experiences in other jurisdictions as to how well those rules have performed, what really came out of those rules and how they were administered. It's a little different in every jurisdiction.

We continue to watch what is happening in British Columbia. However, again, this review by this committee and the recommendations that this committee may make are very welcome, both to the government and to those of us working within the Treasury Board Secretariat, in terms of—

[Kelly McCauley, Conservative, Edmonton West, AB]

The old Department of Industry, now Innovation, Science and Economic Development Canada, did a study about two years ago and put forward 11 recommendations. Have we acted on those recommendations that they put through on their red tape reduction study?

[James van Raalte]

Yes. We are acting on those recommendations.

[Kelly McCauley, Conservative, Edmonton West, AB]

How many of the 11 recommendations have we instituted?

[James van Raalte]

The government agreed with all of the recommendations by the committee. I'm happy to report that we are making progress on all of them.

[Kelly McCauley, Conservative, Edmonton West, AB]

How many of the 11 recommendations have we implemented?

[James van Raalte]

I'd have to come back to the committee on the exact nature of that.

[Kelly McCauley, Conservative, Edmonton West, AB]

Would you be able to?

Was there anything from their report that you thought was lacking, that perhaps we should look at more fulsomely?

[James van Raalte]

It was quite comprehensive. It provided a good sense of direction for the government and was very helpful.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Loyst, quickly, when we bring in regulations for vaping, as you mentioned, does that count for the one-for-one, or is it just considered a brand new technology that therefore we're going to regulate? Does that require less in terms of the one-for-one, to lose one?

[Greg Loyst]

Yes, it would. Any new regulations that are brought in require an offset.

[Kelly McCauley, Conservative, Edmonton West, AB]

Then you do, even on a brand new technology.

Okay. Thank you very much.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll now go to Monsieur Drouin for six minutes, please.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

Thank you to the witnesses for appearing.

My colleague briefly touched on it. When the Red Tape Reduction Act was implemented, there was the one-for-one rule. We know that other jurisdictions have implemented two-for-one.

Is there a reason we wouldn't choose to go for the two-for-one rule? What would be the advantages and disadvantages of staying with the one-for-one rule, and what have we learned from the one-for-one rule versus perhaps going for the two-for-one rule?

[James van Raalte]

The results of the one-for-one rule speak for themselves. We have seen a net reduction financially in cost to businesses in terms of administrative burden.

To go to a two-for-one rule, from an analytical perspective, the jury is still out in terms of the experiences from other countries. The U.K. has rolled back its efforts in terms of going from one-to-one to one-to-two to one-to-three, and in fact, it has eliminated the rule altogether.

Mexico introduced a two-for-one initiative and has scaled that back to a one-for-one initiative, and we are still seeing how that is performing. Spain has a one-for-one rule, and we are watching what they're doing. It depends on what the government is trying to accomplish in terms of administrative burden and looking across at the other tools in the tool box that we have.

We are looking at an annual administrative regulatory modernization bill. The first one was part of the budget implementation act last year in terms of removing regulatory irritants that businesses had identified. We expect to bring forward, with the minister's permission, another reg-mod bill in this session.

I've spoken a little about regulatory reviews, and so has my colleague. It's a question of a balanced package in terms of moving forward on the modernization of Canada's regulatory framework.

[Greg Loyst]

I'll offer a quick perspective.

We've obviously been watching what has been happening in other jurisdictions and some of the conversations that are taking place there. When you look at the early implementation of a one-for-one, or more, there's probably more inventory in the regulatory stock in terms of outdated or antiquated regulations.

You go through your first couple of rounds and remove those, and your regulatory stock gets a bit leaner. Then, when you have a lean regulatory stock and you want to bring forward a new title, and you have to get rid of three, what do you do, particularly for a regulator that regulates in the interest of health? Which risks are less important, or which dangers? Maybe we have to get rid of these precautions because we want these other precautions. It's something that has to be given consideration when looking at that.

Other arguments have been raised in other jurisdictions. What's happening is that regulations are becoming more complex. Regulators are having to save titles: one in, three out. They're taking like regulations and combining them into mega regulations. This makes compliance more difficult for industry. Where you have clear and distinct regulation that's easily understood and easily applied, that works. When you start to combine these things for the sake of saving titles, you could actually increase compliance burden, which is different from administrative burden, but they're in the same vein.

Those are some of the arguments that have been raised when looking at what's going on in some of the other jurisdictions and would be a concern if you were to go to that type of approach.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

When creating regulations for the health sector, for instance, we can think about the slaughtering capacity in Canada. We have CFIA or federally mandated slaughtering capacity, and we have provincial ones. Do we do an analysis in terms of redundancy not only within the Government of Canada but also with the province or with municipalities to ensure that we don't create that extra level of burden for businesses?

[Greg Loyst]

Wherever we're developing regulations, the minimum requirement to achieve the policy objective is our best objective. If there are appropriate measures in place at a provincial level or standards across, whereby we don't need to enter into that space, then we wouldn't enter into that space.

There are always going to be times when we're co-regulating in different areas. On the drug side, for example, we're interested in the security of the supply chain for the drugs, but at the pharmacy level, pharmacists are regulated by provincial colleges. We both regulate at the pharmacy level: we from a security perspective in terms of the integrity of the supply chain, and then others in terms of the practice of pharmacy.

There are times when we have to be in the same space, but we do look at where we can find reductions in duplication. This is very much a lens through which we look at our cost-benefit analysis when we're developing regulatory packages, when we're looking at burden reduction. We want to ensure that we eliminate duplication wherever we can.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

In terms of analyzing, when we have to implement regulations, do we analyze the cost to businesses but also facilitating that for businesses to make their life as easy as possible, if they have to comply with x, y or z? Maybe they can use technology.

How do they comply? Do we do that analysis?

[Greg Loyst]

Yes, we do. Part of the regulatory development is to look at ease of compliance, and we always try to seek measures. We are looking within our department at modernizing as much as we can to move from paper processes to electronic processes. We have a lost and theft reporting requirement under the Controlled Drugs and Substances Act where until very recently people were caused to fax in reports. We've moved to an electronic portal that's open 24-7 so there is ease of time: pharmacists work late in the evenings, so they can file whenever they want. It's things of that nature, where we're looking at electronic portals instead of paper, for example.