Government Operations Committee on June 12th, 2024

[Parm Bains, Liberal, Steveston—Richmond East, BC]

I don't want to leave out Ms. Jones. She, of course, is representing the province of British Columbia.

If I can ask you the same question around the trade barriers from province to province, could you maybe touch a bit on that and on the work you're doing?

[Laura Jones]

Yes, but first I might like to touch on your other question, about AI. We did hear one really good example at the external advisory committee. The City of Kelowna is doing a pilot whereby they're looking at taking housing approvals from weeks and months to a matter of seconds for those basic approvals. Again, it's another example of how working towards regulatory excellence can deliver better outcomes for Canadians, because those staff who were working on those approvals at the City of Kelowna can now be working on more complex approvals.

That's an example of a win-win, and I think that we need to look at equipping our regulators to be world class in Canada.

In terms of your question about interprovincial trade, I don't think we're making nearly enough use of mutual recognition. We tend to approach these things one at a time: “Let's look at why we have different standards for first aid kits in every province and, okay, we'll spend two years aligning those standards.” It's a very inefficient way to go about removing barriers.

Just saying, though, that gravity works the same whether you're in one province or another and we're going to mutually accept that if you're in compliance with one province's standards, that's good enough for another province—unless there's a good reason not to, and then we'll negative-list—would be a way better approach to accomplish more, faster, across Canada on the interprovincial trade front.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you.

[The Chair, Conservative, Kelly McCauley]

I have to cut you off there, Ms. Jones, because we're out of time, but I'm sure Mr. Bains will expand a bit more on his next round.

Mrs. Vignola, please, for six.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Mr. Greco, Ms. Jones, thank you for being with us.

Mr. Greco, I'm going to talk a little bit about capital gains, specifically the capital gains exemption for businesses. Above a certain amount, 67% of the capital gains of businesses will be taxable. What is the capital gains amount for businesses? Do you know?

[Alex Greco]

I don't know at this point.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

It's $3.5 million.

Below $3.5 million, the capital gains inclusion rate remains at 50%, where it is currently. It's on a scale. The bill has not yet been introduced, but it will certainly need amending, particularly with regard to small and medium-sized businesses, or SMEs, some partnerships and agricultural businesses. However, let's not get ahead of ourselves. We'll cross that bridge when we get to it.

That said, earlier, you talked about harmonization among the provinces. Should there be harmonization at the expense of the autonomy and jurisdictions of Quebec and the Canadian provinces? Isn't it instead up to the provinces to decide to sit down together and look at the aspects they need to discuss? Does the federal government absolutely have to stick its big nose in the process?

[Alex Greco]

I think there has to be a collaborative approach between the federal government and provincial governments in terms of regulatory co-operation and harmonization. I think that could be done through first ministers meetings and through FPT meetings that happen between different ministers.

I don't think you need to encroach on federal jurisdiction, but you need to be able to break the silos before you're doing any regulatory changes. Whether you're dealing with medical devices, food products or infant formula, everybody has to be able to talk to each other. Otherwise, you run the risk of duplication, and you run the risk of not protecting health and safety outcomes. The more we collaborate, the better off we all are.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

In terms of harmonization, let's look south of the border, at the American confederation, which has 52 states, if memory serves.

Have those states harmonized, or are the rules different for each one?

There is also the example of Germany, which is a federation. Does it have harmonized rules? Is this an issue that needs to be studied?

[Alex Greco]

I think the United States has made some progress. Another example would be the United Kingdom, where they have looked at harmonization initiatives.

One thing in particular that the U.S. has done through their Office of Regulatory Affairs is that they've launched a whole website that looks at different resources and different regulations between different states and are building that as a kind of concierge service to coordinate harmonization in regulatory activities.

I think that would go a long way, as a public tool, to helping the public understand what's there between different states, as well as helping government to understand that “here are the barriers to growth and here's where there are opportunities to harmonize”. You could even have Canadians or officials from other governments being able to submit those harmonization opportunities through a portal.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

Ms. Jones, among the members of the External Advisory Committee on Regulatory Competitiveness, are there people who represent the interests of the public, or only people who represent business interests?

[Laura Jones]

That's a very good question.

Actually, it's a pretty broad-based group of Canadians. There are several academics on the group, a few who are representing business interests and one for civil society, but what I would say, as one of the reasons I was really proud to be the chair of this committee, is that I think all of us are Canadians first when we come into that room.

I don't think we were there to advocate for our particular sector or interest. Yes, we wanted to bring a perspective and to help shed light on things, but it was a very good group of citizens who were very serious about trying to do the right thing for the country.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

Having sat on school boards, I can tell you that it can be a challenge, even when we tell people that they have to serve the interests of all students, not just their child's. I imagine that your members have also had to put the collective interest ahead of their personal interests, so thank you for clarifying that.

What are the proposed regulations that the members have agreed on, and why?

What about the proposals they had much more trouble agreeing on? What were the reasons for that?

[Laura Jones]

That's another very good question.

One of the first things we did as a committee was to shift the frame. In the committee's name was “regulatory competitiveness”. We agreed very quickly that might put too much emphasis on the need to reduce and might not be the right balance between protection and minimizing burden.

We changed our focus to regulatory excellence, which is really about those high standards that Canadians value and want, as well as a minimizing of the unnecessary burdens. It's an “and” proposition, and that's what we want to do: maintain those high standards and minimize burdens where possible.

You asked where we agreed. We largely agreed, actually, on many things. We heard about disability tax credits being more complicated than they need to be. We heard about uncertainty around timelines for larger projects. We heard from immigrants needing Canadian experience to get licensed while requiring a licence to get Canadian experience and how frustrating that is. We heard about duplication of language assessments. We heard about complicated language.

I think we all agreed on those things that there's room to reduce the burden while maintaining the protections that Canadians rely on. We also—

[The Chair, Conservative, Kelly McCauley]

Ms. Jones, we're past our time, so I'm afraid I have to cut you off there. Again, perhaps we can get back to that in another round.

Mr. Bachrach, please go ahead, sir.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair, and thank you to both of our witnesses.

I'll continue with the very interesting and somewhat abstract topic of regulatory excellence. I like the phrase, because it indicates a balance between, as Ms. Jones mentioned, protection and burden or efficiency.

I'm curious about the topic of cross-border, interprovincial harmonization. Mr. Greco, you spoke about this.

I'll come back to my colleague Mrs. Vignola's question about how to ensure provinces are allowed to take different approaches from each other in areas of provincial jurisdiction. The goals of one province might not be the same as the goals of another province, based on the aspirations and desires of its citizens.

In British Columbia, there's a different building code than there is in Alberta. There's an energy step code that requires buildings to be ever more energy-efficient. Harmonization-wise, there are probably those in the industry who would like to see a lower standard, because the step code imposes certain costs.

How do we get around the fact that provincial jurisdiction is provincial jurisdiction, and provincial governments are accountable to their citizens? They're not accountable to neighbouring provincial governments.

[Alex Greco]

I think it's about establishing micro-forums to enable different provinces to talk to each other.

One of the things you could do is look at, for example, the Canada-U.S. Regulatory Cooperation Council. You could do something similar in terms of how different provinces focus on regulatory co-operation and interprovincial trade barriers. Have work plans and different principles the council could follow in order to ensure that where you have different priority items, you focus on what you can agree on for harmonized standards.

It's a collaboration effort. I don't think you need to be acting in silos to make that happen.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I'm curious. What are the barriers to having those conversations happen now?

[Alex Greco]

I think the challenge is that you have different ministers—let's say the energy minister or the finance minister. It's how much they talk to each other. Sometimes, at a broader level with different ministers, that doesn't always happen. That information doesn't get communicated through a whole-of-government approach.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Okay. It seems that, if there's a good to be achieved here, there's no barrier to ministers reaching out across the border and saying, “Should we come up with a harmonized approach in this area?”

It feels as if, where we have different regulatory systems, one of the reasons is that there are different regulatory objectives in different jurisdictions.

[Alex Greco]

That's a fair point.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

If you have different regulatory objectives, how do you harmonize regulations?

[Alex Greco]

As I mentioned earlier, I think that's where a regulatory bill of rights could come in. This could focus at a federal level but be worked out with the different provinces, as well. You focus on outcomes-based principles and lean principles, and you look at economic analysis and clear objectives. That's one aspect of it.

If you do proper work plans with different priorities, make sure the different provincial ministers report back about what they're hearing from their constituents, then formalize and revise those plans on a regular basis, I think that could go a long way. It requires different governments talking to each other, but they also have to go to the different companies and talk to Canadians to make that happen. Otherwise, that process could be compromised.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

This conversation seems to be driven primarily by the business community. Of course, regulations exist to achieve things other than business competitiveness. They exist to protect citizens. The example of milk was used for protecting safety. All of these things are important.

How do we ensure citizens have a seat at that table when we talk about regulatory excellence?

[Alex Greco]

I think the federal government has started to do that with the Let's Talk Federal Regulations portal, where anybody, if they're Canadian, can submit comments in response to consultations. That's one avenue.

The second thing is this: I mentioned what the United States does with its Office of Regulatory Affairs. There's a portal where Americans can submit. If they're open to transparency, governments can continue to produce accurate cost-benefit analysis and get comments on other regulatory analysis. There's an opportunity for them. To be clear, it has to be not only a whole-of-government approach but also a whole-of-citizenry approach in order for Canadians to be part of the process. They shouldn't be excluded.