Thank you, Mr. Chair and members of the committee. We appreciate the opportunity to speak with you today about regulatory sandboxes and the proposed amendments in Bill C‑15.
Regulatory sandboxes are a well-established tool used by governments around the world to evaluate emerging technologies and innovative practices in a safe, controlled manner. They permit regulators to temporarily exempt a specific organization from narrowly defined provisions of legislation or regulation so that a new product, service or process can be tested under supervision. These exemptions are time limited, apply only to parts of the rules that impede testing and must protect public health, public safety and the environment.
The purpose of regulatory sandboxes is straightforward. They help regulators gather the evidence needed to determine whether existing regulatory frameworks should be updated to safely and responsibly allow innovative products into the Canadian marketplace. As technologies evolve quickly, sandboxes give regulators a structured way to assess risks, to understand impacts and to determine what permanent regulatory changes may be appropriate.
The authority already exists within the federal system, with several ministers already having exemption authorities for the purpose of regulatory sandboxes. For example, the Minister of Transport may issue exemptions to regulation and legislation under the Canada Transportation Act to support innovation, provided that it is in the public interest and that the health and safety of Canadians are protected. The amendments in Bill C‑15 simply extend a similar limited authority to all ministers, subject to clear guardrails.
I would also like to address some misconceptions in the public domain about these amendments.
Bill C‑15 would not allow ministers to exempt any person or business from any federal law for broad policy purposes. There are strict limitations to the exemption authority, restricting its use to testing a product, service, process or regulatory approach in a controlled setting for a limited amount of time. Exemptions could only be made to the specific provisions that prevent the regulator from running the test. Exempting entire sectors of an industry or fast-tracking entire major projects is not within its scope.
The legislation includes explicit transparency and accountability requirements, which will allow for continued oversight and will prevent executive overreach. Ministers must publish exemption orders and an explanation of the decision-making process while protecting confidential business information as required by law. Furthermore, the President of the Treasury Board must table an annual report in Parliament listing all exemption orders issued in the previous fiscal year, the rationale for each and the ministers responsible. This oversight mechanism ensures that Parliament is informed and able to scrutinize the use of these authorities.
Ministers could not use these provisions to exempt themselves or others from obligations under statutes such as the Conflict of Interest Act. The authority applies only to laws within a minister's portfolio and only for the purpose of testing and innovation under regulatory supervision. As with any ministerial decision, exemption orders remain subject to judicial review.
Sandbox testing is not intended to bypass important protections and lead to regulatory changes that compromise safety or environmental standards. The legislation requires that exemptions be in the public interest, that the benefits outweigh the risks and that implementation plans ensure the protection of health, safety and the environment. The purpose of a sandbox is to generate evidence so that regulators can make better-informed decisions about how to maintain—not reduce—these protections in a rapidly changing context.
Finally, it is worth noting that the measures would not encroach on provincial jurisdiction. The legislation itself restricts exemptions to federal statutes and regulations within the responsibility of the minister issuing the order. Moreover, the complementary policy on regulatory sandboxes directs ministers to support federal-provincial collaboration and to meaningfully consult indigenous peoples as part of sandbox development.
Regulatory sandboxes are a valuable tool to help Canadians remain competitive while ensuring that our regulatory system continues to protect Canadians. They allow regulators to adapt safely, transparently and responsibly to technological change. The amendments in Bill C‑15 introduce consistent guardrails, enhance accountability and strengthen government-wide due diligence in the use of this mechanism.
Thank you. We would be pleased to take your questions.
