OECD Regulatory Policy Outlook 2018

The OECD released the OECD Regulatory Policy Outlook 2018 in October of this year, and I thought it would be an interested exercise to go through the major points and provide my views as well as my take on Canada’s place among our OECD peers. Over a series of posts, I will discuss the observations within the report in the context of Canada’s regulatory regime.

Quality of Regulatory Development

Legislation, including subordinate legislation like regulations, need to be supported by sound evidence, developed within a framework of broad consultations, and, most importantly be accomplish policy objectives effectively.

As regulators, we are constantly up against the perception that all regulation stifles economic activity and should be minimized, if not eliminated.

The OECD report defines regulatory quality as having regulations and regulatory processes “in line with the principles of consultation, transparency, accountability, and evidence … [and] whether regulations are effective.” They provide nine practical indicators of regulatory quality:

With the release of the Cabinet Directive on Regulation (CDR), which came into effect September 1, 2018 in Canada and the associated guidance, contain a significant number of improvements designed at increasing the quality of regulatory proposals.

Examples of improvements which should increase the quality of regulations:

• Renewed focus on consultations throughout the regulatory lifecycle.
• Explicit focus on regulatory agencies assessing opportunities for alignment with other jurisdictions, both at home and abroad.
• More detailed Forward Regulatory Plans to provide early opportunities for identifying and engaging stakeholders as well as providing details on consultation opportunities, identifying business impacts, and publishing ex-post facto review schedules.
• The Triage Statement and Regulatory Impact Analysis Statement (RIAS), now includes significant emphasis on early and comprehensive analysis of the proposed regulations. The following analyses are now mandatory with the level of scrutiny determined by the potential impact of the regulations:
  • Strategic Environmental Assessment
  • Gender-Based Analysis+
  • Modern Treaty Obligations
  • Cost-Benefit Analysis
  • One-for-One rule
• Finally, the CDR lays out a robust set of requirements for a review of existing regulatory stock as well as requirements for planning regular ex post facto regulatory reviews of regulatory proposals.

As a result of these changes, the OECD now ranks Canada’s regulatory regime’s stakeholder engagement, regulatory impact assessment, and ex post facto evaluation of regulations higher than 2015 and higher than the systems in place for primary legislation.

My only thoughts relate to the need to ensure a balance between significant analysis at the Triage and RIAS stages and the burgeoning time horizon to implement Governor-in-Council regulations. We need to ensure that impacts are understood while still ensuring that subordinate legislation such as regulations can occur within a timeframe to allow the government to keep up with the accelerating growht of progress.