Mr. Carrier, you are right in saying that in federal legislation, a regulatory power is very rarely granted to anyone other than the governor in council. That is a rare occurrence. In federal laws, most of the regulatory powers belong to the governor in council. In some exceptional circumstances, they would be granted to the minister, and on a very rare occasion, as in this case, they are granted to a federal body.
Therefore, if the agency is forced to regulate, upon recommendation by the minister, the discretionary power that is usually part of the regulatory power would be maintained. Therefore, if the wording is changed to read "The Agency shall, on the recommendation of the minister, make regulations [...]", it would not affect the discretionary nature of the regulatory power. For that reason, the department sees no problem with it.