Industry Committee on April 13th, 2021

[Laura Jones]

I'd be happy to expand on that.

The vaccine is a good example. Normally, that would have taken the better part of a decade. There was an understanding that we had an outcome here that we needed to achieve and that was more important than.... While we needed to continue to check all of the health and safety boxes, we needed to get rid of anything that was unnecessary in that process. There was some doing of things in parallel, for example, that helped speed that up. That's really a change in thinking.

At the municipal level the idea of approving a patio in less than 48 hours would have been just completely inconceivable. At the provincial level, we're allowing doctor's appointments to happen online.

There's a focus on what needs to happen. There's a focus on, yes, making sure that the health and safety environment is protected, but I think there has been a shift away from worrying about things that aren't aiding those two things. That culture change is—

[Majid Jowhari, Liberal, Richmond Hill, ON]

I'm sorry to interrupt, but what you're saying is that it's becoming more outcome-based. We need to become more outcome-based. We need to become more agile. We need to be strategic, to collaborate and to be able to do things in parallel, yet meet all the guidelines and work collaboratively to get it. Great.

Having said that, you identified data availability as one of the challenges. Are there other challenges, first of all, aside from data availability? You seem to spend a lot of time on data availability. Are there other challenges aside from data availability that you would like to highlight?

[Laura Jones]

Absolutely. On the challenges, which you just flagged, has to do with the culture. I would say those are the two big challenges. Being very risk averse is another piece of that culture. When you try to get risk down to zero, the problem is that you introduce other risks, and there's a lot of risk aversion in the system.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

You talked about data availability or lack of data availability, which you've said impacts the accountability and, therefore, restricts the amount and the frequency of the reporting that could be put forward. I know that this question was asked before, but what type of data would be most important to be made available at the earliest stages as we build more systems or processes to be able to gather more data?

[Laura Jones]

Of course you're going to want the data that looks at very specific rules, and we have some of that when you think about cost-benefit analysis. There's a lack of sector-specific data.

I would say that the biggest thing that's missing is a fairly simple and straightforward aggregate measure of the total burden of regulation. Here, we have a tendency to want to make the perfect the enemy of the good, but I would look at both Manitoba and British Columbia as good examples.

Twenty years ago, British Columbia set about reducing its burden by one-third in three years. They've actually cut it by about 50%, and they have a fairly simple way of measuring it. Is it perfect? No. Has it driven a lot of good changes and has it reduced the regulatory burden for citizens? Yes. They also do an annual report where they look at other things outside of the measure that have improved the lives of citizens—for example, simplifying forms for welfare applications.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay. We end up back at the measurement. You've once again highlighted B.C. and Manitoba as the ones that have managed to reduce the burden by about 25%.

You didn't get a chance to finish your response to my colleague Mr. Généreux, but can you finish your thoughts on the measurement? I think that's the one that's really going to tie the challenge back into the cultural shift.

[Laura Jones]

In British Columbia, what they do is measure every time there's a “shall” or a “must” or some kind of prohibition. They count that not just in the regulation, but also in the legislation and the policy, which is important. They call this “regulatory requirement”. They had a count of about 380,000 when they started. That's what they set the target at to reduce. Manitoba did a more comprehensive measure, and they came out at close to a million regulatory requirements. They also have set a target to reduce those requirements.

What it does is it focuses the mind across all departments: What can we reduce without affecting those health and safety environment outcomes? I would say that the bureaucracy is very good at that. They're very good at protecting the health and safety outcomes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

I apologize, Mr. Dachis. I didn't get a chance to allow you to respond.

[The Chair, Liberal, Sherry Romanado]

Perhaps in a subsequent round he could chime in.

Mr. Lemire now has the floor for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

I'll continue to address my questions to Ms. Jones from the Canadian Federation of Independent Business.

You said something particularly noteworthy if not shocking: the cost of the administrative burden is inversely proportional to the size of the business. Obviously, the smaller the business, the higher the cost per employee. SMEs want any changes to the interactions between businesses and the government to be at zero cost to businesses.

What do you think of the one-for-one principle? According to this principle, each time the government imposes a new formality, it should remove another one or the equivalent of the financial cost borne by the businesses.

[Laura Jones]

I'm sorry. I'm not sure the translation was perfect at the end of your question.

Did you ask what I would think of the government taking away some of the costs for a small business?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

I wanted to know what you thought about the principle that the government should withdraw a regulation if it wants to create a new one. Also, if there are administrative costs associated with the new regulation, the costs of the existing regulations should be reduced by the same amount. The long-term goal of this principle is to reduce the administrative burden.

[Laura Jones]

I understand.

Yes, this is like a one in, one out policy. We have that in place, actually, federally in Canada. I think there was only one MP who voted against it at the time, so it was widely supported.

The challenge is that it's on a very narrow base. It only looks at regulation, but a lot of the burden from regulation comes in the form of the policies. Some of it also comes in things that are in the legislation, and those are left out. One simple recommendation would be to include those in your one in, one out policy, but I would suggest that this only maintains where you are and that federally we have an opportunity to reduce.

I would suggest a “one in, two out” policy for a time period to achieve that 25%. Then you go to the one in, one out policy. That's what British Columbia did, and they continued to reduce with that policy. They hit their reduction target of one-third. Since then, with one in, one out, they have gone to almost a 50% reduction. British Columbia maintains high levels of the health and safety environment, so it's an example of what can be done and how much reduction you can have while still protecting the things we all care about.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Ms. Jones.

I'll ask you one last quick question.

In this situation, do you find that the federal government and its various senior officials and ministers are sufficiently accountable?

[Laura Jones]

The simple answer is no.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

Our next round of questions goes to MP Masse. You have two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I'm going to return to the issues related to the Competition Bureau, because I think they're really important.

To go back to Mr. Vaillancourt and Ms. Larkin, what is Canada's reputation with regard to our current laws, which are out of step with those of the United States and Europe? I hear from different congressional and Senate members regularly about the fact that we are a bit behind. Concerns are expressed about our trade relations in that regard.

I'm just wondering whether there is a broad range, especially among the academic community and so forth, of an appreciation that Canada is out of step with the rest of the world, especially with the digital economy emerging to be quite the discussion point.

[David Vaillancourt]

I'll take that first, I suppose.

There's one area that I found a lot when we used to be able to go to conferences. At the American Bar Association antitrust conference, in speaking to my peers from the United States and Europe, I found that they were all gobsmacked by the lack of the private right of access to the Competition Tribunal for abuse of dominance matters. It just boggles the mind that it's not an option for Canadian businesses.

Given the length of time for this round, I'll cede the rest of the answer time to Ms. Larkin.

[Dr. Yelena Larkin]

Thank you so much. I appreciate it.

From the research standpoint, several big markets were examined, the U.S. in contrast to the European. Overall, the conclusion is that U.S. markets are characterized by very lax enforcement, starting with President George W. Bush and up until now, essentially. As opposed to that, the European Union stands on the other side of the spectrum.

When you look at the data there are studies of trends in concentration that are consistent with those two ranges. In the U.S., we saw an increase in the concentration. In the European Union, we did not. The European Union was the first one to prosecute Google, for example, when it comes to the digital economy. From that standpoint, Canada seems to be much closer to lax enforcement, and maybe even further to the other side of the spectrum.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

Our next round of questions goes to MP Cumming for five minutes.

[James Cumming, Conservative, Edmonton Centre, AB]

Thanks, Madam Chair.

Mr. Dachis, thanks for appearing today. You caught my ear with permitting time. I toured a Tesla facility in Nevada, and what struck me was how open for business they were. They asked what they could do to make things happen there, and they had a grading permit within two weeks, which would be unheard of in Canada.

That's not the only cost, is it, on competitiveness for Canada? When you look at competitiveness, it's not just zoning and development changes, but it's all the other associated costs, particularly for medium-sized and small builders: compliance costs, tax compliance costs, CPP going up, EI going up, the carbon tax. All of that is making us incredibly uncompetitive, and Canada has been on a nosedive on competitiveness.

Is it not a broader issue than just this regulatory framework under development projects?

[Benjamin Dachis]

For sure, and this will go back to some of MP Jowhari's questions related to some of the other things we can think of in the World Bank doing business measure. We mentioned dealing with construction permits. What about getting electricity hooked up? Canadian cities or businesses in the city of Toronto are way behind the rest of the world in terms of this metric. This is again where the World Bank doing a business metric can be a very good tool to understand the cost of doing business across the country. Asking the World Bank to do this kind of study will get into things like how hard it is to get electricity set up in, say, Edmonton or to access the court process in Quebec.

Mr. Cumming, so many things you mentioned in terms of the regulatory burden or other burdens are at the provincial and municipal levels. We don't know what a lot of these barriers are so we need better data. The World Bank has an off-the-shelf tool that we just need to ask them to apply to Canada.

[James Cumming, Conservative, Edmonton Centre, AB]

Mr. Swampy, thank you for being here today.

Coming out of COVID, we're going to need enormous economic growth in this country, and we had anemic growth prior to COVID. We were about 1% of GDP, so it was quite slow. You're offering some alternatives, saying that first nations people want to participate and were willing to participate with northern gateway.

How frustrating is it for you, with the added regulatory burdens to try to stop major projects like this? Bill C-48 would be an example of that, the tanker ban, as well as Bill C-69.

I want to hear more from you. Are you frustrated, because it sounds like you want to be part of the solution?

[Dale Swampy]

I think our biggest problem was, first of all, that we didn't participate in the 150 years of natural resource development that went on in this country. I think it was probably partly our fault and partly the government's fault. Our ability to be able to participate in the natural resource industry as employees and contractors needed a little push. I think Canadians on average are very polite and progressive individuals. They treat people who come into this country with respect, help them get a job, get a house and so forth. We need that kind of consideration for first nations.

The ESG movement that's going on right now has enhanced our ability to be able to participate in the natural resource industry, and it comes at a time when the government has put on so many regulations that we're hindered in our ability to be able to get employees out there. For example, we have 12,000 self-identified indigenous [Technical difficulty—Editor] and that figure has increased to 14,000, even in consideration of the downturn and so forth. You're seeing more young people wanting to get involved in the natural resource industry, because it pays a lot more than any other industry and it gives you a lot more skills that you could transfer to other industries. We have to take advantage of that.

Last year we had over $1 billion in contracting opportunities for small businesses. Small business competition on first nation reserves has increased significantly. You have the Fort McKay First Nation, which has probably the most contractors per capita on a reserve in the country, with a zero unemployment rate. It took decades for them to transition from unemployment and despair to the kind of income that they have right now. We need the government's help to do this.

The only way we're going to get away from regulations is not to destroy the regulations but to bring in the first nations people who really are concerned about the environment, the land, the wildlife, fisheries, the air. First nations people aren't going anywhere, so they're the best equipped to handle that.