Thank you, Madam Chair.
Thank you for the invitation to join you here today. I want to focus my remarks on how regulations can impact Canada's competitiveness. This issue has been a recurring theme and has significantly influenced the current federal approach to regulation-making as well as most regulatory reform initiatives to date.
Let me start by saying that regulations are essential to protect consumers, ensure the health and safety of Canadians and safeguard the natural environment. It is understood that when government imposes any rules, like a labelling or testing requirement, it will create costs for those who need to comply. When we at TBS talk about a regulation's impact on competitiveness, we are referring to the unnecessary costs or inefficiencies, or “sludge”, created by a regulation or its program. These can be the result of duplication and overlap across jurisdictions, slow and manual processes, or requirements that are too prescriptive and thus impact a firm's ability to use technologies and adopt innovative approaches.
The Government of Canada governs the development, management and review of federal regulations through a policy called the “cabinet directive on regulation”. One of the four key principles of the directive is that regulations must support a fair and competitive economy—that is, regulations should aim to support and promote inclusive economic growth, entrepreneurship and innovation for the benefit of Canadian business.
To limit the costs imposed on Canadian business and to achieve other public policy objectives, the Treasury Board of Canada Secretariat requires that regulators undertake significant analysis when designing and planning the implementation of regulations. For example, they must look at the impacts on small business, the impacts on international trade and regulatory alignment with other jurisdictions, modern treaty implications and environmental impacts, and conduct gender-based analysis. There are also measures in place like the legislated “one for one” rule under the Red Tape Reduction Act, which works system-wide to control the growth of administrative burden on business. For every new dollar of administrative burden imposed on business, federal regulators must find a dollar in savings.
Since the implementation of the cabinet directive in 2018, TBS has focused on initiatives to improve regulatory competitiveness, agility and innovation. We have regulatory co-operation fora with the U.S., the EU and the provinces and territories to reduce regulatory misalignment and barriers to trade. We are undertaking comprehensive regulatory reviews to identify rules and practices that are creating bottlenecks to growth and innovation. We have established a centre that focuses on building capacity for regulators to design flexible regulations in order to enable new and innovative products to come to market. We are developing other tools, such as an annual TBS-sponsored piece of legislation to remove requirements that stand in the way of modernizing regulations—for instance, requirements for wet signatures or the use of outdated technologies like fax machines.
The advice of TBS's external advisory committee for regulatory competitiveness has been crucial in helping shape the direction of these modernization initiatives and provide advice on others being considered. The committee has highlighted some challenges that are real in trying to address the issue of regulatory competitiveness.
First, regulatory costs are not limited to federal regulation. Burden stems from all governments—federal, provincial, territorial and municipal. All rules, programs and taxation create burdens for stakeholders, whether they be business, not-for-profits or individuals. Very often, there is a misunderstanding of what is truly in the federal regulatory sphere.
Second, there is no universal way or accepted methodology of measuring cumulative burden or the impact of regulation on competitiveness. In 2019, TBS commissioned the OECD to examine the approaches used around the world to better consider regulatory competitiveness. I can tell you that there is very little to work with in this area.
To address this gap, we've been working with the University of Waterloo's Problem Lab to pioneer an approach on measuring cumulative burden by examining a real situation, that of building a meat-processing plant in the municipality of Hamilton. One can imagine the complex interactions between zoning bylaws, environmental regulations and food inspection regimes—and those are the known administrative hurdles.
To conclude, I want to reiterate that regulatory competitiveness continues to be a priority for TBS. We share your interest in ensuring the regulatory system supports economic growth and regulatory efficiency and take seriously all recommendations to minimize the adverse impacts of regulations on competitiveness while maintaining Canada's high standards for health, safety, security and environmental stewardship.
Thank you, Madam Chair.
I'm happy to answer any questions you may have.