Skip to content

Tag: One-for-One Rule

Cabinet Directive on Regulation Guidance Policy Suite

The Treasury Board of Canada Secretariat has released the policy guidance on the new Cabinet Directive on Regulation (CDR) which came into force on September 1, 2018.

The policy suite released consists of five policy documents:

I have had the opportunity to review and comment throughout the development process, but over the next week I hope to discuss some of the more important changes here.

I did notice that the while regulatory stock reviews are referenced in the CDR and in the Policy on Limiting Regulatory Burden on Business, the guidance documents for regulatory reviews have not yet been published.  It will be interesting to see the impact regulatory stock review will have on the regulatory development cycle, the workload of regulatory affairs departments, and the publication and usefulness of Forward Regulatory Plans.

Leave a Comment

International Review of Regulatory Impact Analysis Guidance

Note from the Editor

New draft guidance and templates have been developed to support the newly released Cabinet Directive on Regulation which comes into force tomorrow, September 1, 2018.  The research for this post was researched and largely developed prior to seeing the draft updated policy and template.  I will post this as it represents my thinking at a moment in time, and will follow up with my thoughts on the new templates and policy guidance for developing RIASes.

Overview of Regulatory Impact Analysis

One of the vital components to developing regulations is to inform Government, stakeholders, and the public about the issue, context/background, options considered, and the impacts, economic and otherwise, as well as their distributional impacts to aid in decision making.

The OECD defines Regulatory Impact Analysis (RIA) as “… a systemic approach to critically assessing the positive and negative effects of proposed and existing regulations and non-regulatory alternatives1.”

As of 2014, 32 of 35 OECD member countries have implemented some form of formal RIA as part of the regulatory development process2.

Review of RIA guidance

Of interest to me is the varied requirements, templates and implementations of RIA around the world.  Specifically, the guidance available to regulators to direct the analysis is of particular importace.  I think we can learn a lot from a review of the applicable guidance from similar jurisdictions. Canada’s main RIA Guidance document is the “RIAS Writer’s Guide,” which will be eight years old this year.  As Canada is currently in the final stages of it’s five year regulatory policy suite renewal exercise, it is likely that this guide will be updated in the next year to meet the requirements of the new directives.  During this update, there is much we can learn from a review of what others are doing.

I have selected the following countries for my initial guidance review with links to their guidance documents:


All of the above-mentioned countries require, to varying degrees, significant impact analysis, written in plain language, explaining the problem, historical context, policy options, as well as the costs/benefits of the various approaches.  The level of detail and place in the regulatory development continuum may vary by country, but all of the nations have implemented a mandatory and standardized reporting regime for describing and analyzing impacts of proposed regulatory action.

Fast-track for simple/technical amendments


Canada has an expedited process for correcting errors, omissions, and inconsistencies (commonly linguistic inconsistencies between the English and French) in regulations.  These simple technical/housekeeping amendments are known as Miscellaneous Amendments Regulations (MARs).

The MAR process is significantly faster as it uses the low impact (minimal requirements) RIAS, is generally exempt from pre-publication in the Canada Gazette, Part I.  Additionally, communication plans, and many other components are not required.

The criteria for a MAR is a proposed regulation with no triaged impact which corrects one of the following:

  • Errors in format, syntax, spelling, and punctuation
  • Typographical errors, archaisms, anomalies, and numbering errors
  • English/French inconsistencies which are non-substantive
  • Obsolete regulations
  • Spent regulations

In my experience, the most significant use of MARs is to address issues raised by the Standing Joint Committee for the Scrutiny of Regulations which are triaged as having no impact.

United Kingdom

The UK has a process for “trivial or mechanical” amendments which keep the regulations in line with the original intent of the policy.  This allows exempts the regulations from requiring “collective agreement,” which is to say approval of the relevant Cabinet Committee and the RRC. Additionally, the UK RIAS policy provides for a “Fast Track” process for deregulatory measures that meet certain criteria.

One-for-One and Two-for-One deregulatory efforts


Canada’s regulatory regime incorporated a system of requiring one regulatory title to be removed for every new regulation published and for an equivalent or greater administrative burden to be removed for every administrative burden imposed by new or amended regulations. These reconciliation must take place within 24 months and the requirements are enshrined in the Red Tape Reduction Act and Red Tape Reduction Regulations.

United States

Executive Order 13771 “Reducing Regulation and Controlling Regulatory Costs” directs regulatory agencies to repeal two existing regulations for every new regulation while ensuring that the total costs of regulation do not increase.  This policy builds on top of Circular A-4 and all subsequent Executive Orders.

United Kingdom

The UK has a policy of One-in-Two-Out (OITO) which requires every pound of additional net cost imposed on business by regulation must be offset by two pounds of net savings from deregulatory measures.[

What can we learn?

Clear defined purpose

Australia provides a clearly defined series of seven questions which must be answered by the RIA (or RIS in AU terms):

  1. What is the problem you are trying to solve?
  2. Why is government action needed?
  3. What policy options are you considering?
  4. What is the likely net benefit of each option?
  5. Who will you consult about options and how will you consult them?
  6. What is the best option from those you have considered?
  7. How you will you implement and evaluate your chosen option?

These questions may look extremely familiar for anyone involved in policy analysis as these seven questions frame the key questions that a strong policy paper should seek to answer.  While Canada clearly advocates the same complete analysis, I believe clearly defined policy questions like these placed prominently within the RIAS Guidance send the signal that you cannot avoid the policy work necessary to strong, evidence-based, and transparent regulatory action.

Post-Implementation or Ex Post Facto Regulatory Review

The United Kingdom, Australia, New Zealand, and Israel mandate departments review regulations on a period basis.

Canada and the United States have all regulations referred on a permanent basis for review.  In Canada, all regulations are permanently referred to the Standing Joint Committee for the Scrutiny of Regulations which is reviews regulations against thirteen criteria, but does not review to ensure regulations are achieving the intended goals.  The United States requires various departments to post a plan for regulatory review of all regulations which impose burdens on businesses.

Canada current has no central requirement for regulating departments to review regulations on an ongoing basis (although this is highly encouraged in policy).  With the coming-into-force of the Cabinet Directive on Regulations, these requirements are expected to change and once the policy is official, I will outline my thoughts.  I believe that the best practice would be to require Ex Post Facto reviews of all regulations on an ongoing basis.  I believe that the American policy of requiring a regulatory review plan to be published for each planned regulation would be ideal for the sake of transparency.  Additionally any post-implementation review should consider whether or not the regulation is achieving the desired policy outcomes, impacts to stakeholders through consultation opportunities, and should seek to reduce burden and barriers to trade through regulatory cooperation wherever possible.

Emphasis on analysis of impacts to Small Businesses

All of the guidance reviewed placed a specific emphasis on determining the effects on small businesses, developing flexible options, and in the case of the UK and Canada formalized an increased burden on completing the RIAS with respect to small businesses.

Given that small businesses comprise that vast majority of Canadian businesses, it is essential to understand the impacts of proposed regulations on the small businesses.  Additionally, providing flexible options for small businesses can offset the potentially disproportionate impact of regulation on these businesses.

Cost-Benefit Analysis

All reviewed guidance contained clear requirements to provide in-depth Cost-Benefit Analysis of regulatory proposals.

The UK guidance went a step further (emphasis mine):

“Government will regulate to achieve its policy objectives where the analysis of costs and benefits demonstrate that the regulatory approach is superior by a clear margin to alternative, self-regulatory or non-regulatory approaches.”

The importance of the Cost-Benefit Analysis to the decision-making process cannot be overstated.  We need strong policy and challenge functions to ensure it is objective and does not selectively include criteria that supports the policy objective to regulate.  All options must be considered thoroughly, including status quo, policy alternatives, self-regulation, etc.


The vast majority of guidance was consistent on all major requirements for Regulatory Impact Analysis.  Each jurisdiction approached the RIAS in different ways.  Australia, used the RIAS to ensure the policy was complete and all of the best public policy practices had been thoroughly researched and discussed.  The United Kingdom uses a much more formal structure for regulatory proposals based on a series of flow charts which lead to various committees or groups reaching agreement on the princples of the regulations.

I feel confident that Canada is well-positioned among its peers in the regulatory guidance it provides and the requirements necessary to complete a RIAS.  I will provide an update once the Cabinet Directive on Regulation and all associated policy material is publicly released in the next few weeks.

Leave a Comment

Regulatory Reform Series – One-for-One Rule

This post is part of an ongoing series on the Government of Canada’s regulatory reform efforts. This post will discuss the One-for-One rule.

One-for-One Rule

In 2012, the Government of Canada introduced the “One-for-One” rule to “reduce administrative burden (i.e., the time and resources spent by business to show compliance with government regulations)” through the implementation of the following two elements of the rule:

  • When a new or amended regulation increases the administrative burden on business, regulators are required to offset – from their existing regulations – an equal amount of administrative burden cost on business.
  • It requires regulators to remove a regulation each time they introduce a new regulation that imposes new administrative burden on business.
    • Regulators are required to provide offsets within two years of receiving final approval of regulatory changes that impose new administrative burden on business.
    • The value of the administrative burden cost savings or cost increases to business are made public in the Regulatory Impact Analysis Statement when the regulatory change is published in the Canada Gazette.

The One-for-One Rule was implemented along with the other systemic reforms in the Red Tape Reduction Action Plan.”1

International Context

Many countries work to limit administrative burden on businesses.  The Standard Cost Model used in the calculation of One-for-One rule burdens was developed in the Netherlands and is used by many jurisdictions.  The United Kingdom and Australia both use models which have compulsory offsets to introduced regulation.  Additionally, the UK and the Netherlands have regulatory burden reduction targets.  Canada was the first country to legislate the control of administrative burden through a mechanism similar to the One-for-One rule2.  In the United States,  President Donald Trump signed Executive Order 13771 “Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs,” colloquially known as the Two-for-One rule as it requires two rules (regulations) be repealed for every regulation introduced.

Canada’s Implementation

The core of Canada’s regulatory reform designed to reduce burden on business is the One-for-One Rule.  The rule was introduced in January 2012 and quickly implemented by the Treasury Board Secretariat of Canada (TBS) on April 1, 2012.  Departments and agencies began implementing the One-for-One rule and in the first year of implementation had reduced administrative burden to businesses by $20 million dollars annually.  The Government committed to enshrining the rule in legislation in the 2013 Speech from the Throne3.  The Government introduced the Red Tape Reduction Act on January 29, 2014 and it received Royal Assent on April 23, 2015.  Subsequently, the Red Tape Reduction Regulations were introduced providing explicit instructions on the calculation of administrative burden to ensure that calculated values would be comparable over time.

Finally, the Government began reporting on the effects of the rule starting with the 2014-2015 Annual Report on the Application of the One-for-One Rule, summarizing the impact of Canada’s regulations on administrative burden over the fiscal year and listing all regulations which triggered the rule as well as the individual impacts on the balance of regulatory burden imposed on businesses.

In practice every regulating department or agency must use the Standard Cost Model to analyse the net administrative benefit to Canadian businesses during the Triage stage.  If the One-for-One rule applies (there is an impact to businesses), then a detailed and substantiated calculation of administrative costs and benefits is performed in consultation with impacted stakeholders and reported in the Regulatory Impact Analysis Statement(RIAS) in a dedicated section.  In addition to publication of the effects of the regulation on administrative burden in the RIAS, the regulating department or agency my submit a template describing the impact to Canadian businesses and whether a carve-out (non-discretionary, tax, or emergency) applies.  If the regulation is new and imposes burden (IN), the regulating department or agency (or portfolio, in the case of portfolio departments) has 24 months to remove a regulation from the stock of regulations (OUT) to offset the increase.  Additionally, for every dollar of burden imposed, the agency has 24 months to offset the additional cost. Regulations removed or administrative burden reduced (OUTs) remain on the balance sheet to offset future burdens (INs).

Assessment of Current Implementation

What is working well?

  • Since the introduction of the rule, Canadian regulators have reduced administrative burden on Canadian businesses by $24.7 million annually. 4
  • More emphasis is placed by TBS on calculating and documenting administrative burden in the Triage and RIAS, which in turn means that regulators are spending more time determining administrative impacts of proposed regulations.
  • Ministerial accountability over a 24-month period ensures that senior management is keenly aware of administrative burden imposed on regulated businesses in their purview.

Potential issues that should be addressed

  • There are two components to the rule: Element A (every dollar of imposed administrative burden must be offset by removing a dollar of administrative burden) and Element B (every new regulation must be offset by the repeal of a regulation.) . Element A places strong limits on the growth of the administrative cost to regulated businesses.  Element B doesn’t directly relate to the burden experienced by business.  Some individual regulations may count as several INs, while a larger regulation would count as a single IN, but impose more burden.  Additionally, while review of regulatory stock and removal of expired or unnecessary regulations is necessary, I do not believe there is evidence to suggest that a one-for-one ratio should exist for regulatory titles.  Innovation and changing regulated landscapes drive the need for new regulations to protect the health and safety of Canadians and do not necessarily mean that existing regulations are burdensome and should be remove.  I would suggest Element A be retained, and element B be retired in favour of strong language requiring ex post facto regulatory review and reporting.
  • While consultations are a mandatory component of regulatory development, the One-for-One Rule implementation could benefit from guidance directing regulating bodies to consult on administrative costs and benefits.
  • Departments and agencies publish One-for-One results and do not perform any ex post facto regulatory review of assumptions and costs/benefits used in the One-for-One Rule to validate impacts.


  • The One-for-One Rule is, in my opinion, one of the most successful regulatory reforms introduced as part of the Red Tape Reduction Action Plan.
  • The Element B (Title Stock) component does not seem to provide a rein on administrative burden, but does increase work for departments and agencies and encourages single monolithic regulations over smaller and clearer regulations.  I recommend eliminating the Element B component and replacing it as a component of a newly introduced mandatory ex post facto regulatory review.
  • Departments and agencies should be encouraged to evaluate assumptions of administrative costs and benefits after implementation of regulations to ensure that claims about reducing administrative burden are real and validated by industry and not theoretical.
  • While annual reporting is good (and required by the Act), I would like to see a website hosted by TBS which lists all regulatory actions and their associated impacts.  One could search by Department or Agency and time period.  One could look at a regulation over time and see the cumulative impact to administrative burden.  The data is already all held by TBS, all that is required is a user-interface, and most likely a better backend to store One-for-One data.  I believe Canadian businesses, media, and even average Canadians would benefit from the transparency of being able to determine where the greatest increases/decreases in administrative burden are coming from, which industries are most heavily impacted, which regulations impose the most administrative burden, etc.
Leave a Comment