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Tag: Regulations

Regulatory Reform Series – Forward Regulatory Plans

This post is part of an ongoing series on the Government of Canada’s regulatory reform efforts. This post will discuss forward regulatory plans.

Forward Regulatory Plans

In 2012, the Government of Canada committed to “give Canadians, business and trading partners greater opportunity to inform the development of regulations and to plan for the future” by requiring departments to publicly post forward regulatory plans of “anticipated regulatory changes that a regulator intends to bring forward over a 24 month period.”1

International Context

The Organization for Economic Cooperation and Development’s (OECD) “Recommendation of the Council on Regulatory Policy and Governance” (OECD, 2012) “sets out the measures that Governments can and should take to support the implementation and advancement of systemic regulatory reform to deliver regulations that meet public policy objectives and will have a positive impact on the economy and society.” From these recommendations came a call to governments to be more open and transparent in the regulatory process.  Many jurisdictions have implemented or improved existing mechanisms of notifying businesses and the public of planned regulatory actions.  For example, the United States’ regulatory oversight body, the Office of Information and Regulatory Affairs maintains the Unified Agenda which “provides uniform reporting of data on regulatory and deregulatory activities under development throughout the Federal Government” 2 The US does a great job of providing two major portals: reginfo.gov for forward regulatory planning and ex-post facto regulatory review and regulations.gov for stakeholders to review and comment on proposed regulations.

Canada’s Implementation

One of Canada’s solutions to increasing transparency and predictability in the regulatory sphere is the Forward Regulatory Plan (FRP).  Departments and agencies are required to post planned regulatory actions which are expected to be completed in a 24-month period to the “Acts and Regulations” section of their public website.  The posting is governed by a specific template which includes the following elements3:

  • Title or Working Title of the Regulatory Initiative
  • DescriptionConcise description of the regulatory initiative including the objective and the enabling Act.
  • Indication of Business ImpactsOne of two pre-determined statements on whether there are expected impacts to business.
  • Public Consultation OpportunitiesHow and when will Canadians be consulted.
  • Departmental ContactContact information to reach a specific contact who should be able to deal with questions personally.

The Forward Regulatory Plan is posted annually on April 1st and formally updated October 1 of every year.  As a best practice, departments and agencies make updates to the Forward Regulatory Plan on an ad hoc basis as changes occur, such as when consultation opportunities arise or are concluded.

Departments and agencies are responsible for maintaining a section of their public website devoted to Forward Regulatory Plan (e.g. Canada Border Services Agency Forward Regulatory Plan 2017-2019).  Treasury Board of Canada Secretariat hosts a list of all available Forward Regulatory Plans by providing links to the department and agencies’ FRPs.

Assessment of Current Implementation

What is working well?

  • FRPs Improve transparency and gives stakeholders earlier notice of proposed regulatory actions.
  • The Public Consultation Opportunities section provides early notice of upcoming consultation opportunities
  • Allows interested parties who may not be captured in stakeholder communications to learn of proposed regulatory actions.
  • The requirement that the Departmental Contact be a specific contact who can personally answer questions related to the initiative reduces the frustration in trying to determine who to reach with respect to planned regulatory changes.
  • Departmental hosting of Forward Regulatory plan reduces time and complexity in posting and updating the FRP.

Potential issues that should be addressed

  • Distributed hosting of Forward Regulatory Plan data as websites makes any form of aggregation, categorization, or searching across departments and agencies nearly impossible.
  • Distributed hosting implies that stakeholders will be aware of which agencies are responsible for any regulatory areas they are interested in.  Sometimes several agencies regulate a given sector (e.g. Immigration, Refugees, and Citizenship Canada and the Canada Border Services Agency jointly administer many aspects of the immigration sector, but a stakeholder may not think to check planned regulations at the CBSA when trying to determine the planned regulatory changes related to immigration.
  • The TBS-hosted list relies on agencies and departments updating them when URLs change.  As this doesn’t always happen, there are often inaccessible (HTTP 404) FRPs linked in the list.
  • Once the regulations are published, the regulatory initiative is removed from the forward regulatory plan, but plans may also be removed if priorities or regulated sectors change and an initiative is no longer needed.  Users of the Forward Regulatory Plan have no indication as to what happened to an initiative.

Recommendations

  • Centralized hosting of all FRPs on the TBS website would eliminate many of the issues identified above.  It would allow a single portal to be developed which would facilitate searching by department/agency, subject, regulation being amended, enabling authority, or even by subject (FRPs could be tagged with subjects to assist with this).
  • Moving to a better data model for FRP data (such as a simple XML-based model). To retain the ease of control/updating, departments could post the XML which would be aggregated by TBS and stored in a database which would be the backend for the regulatory planning portal.  Additionally, the XML schema I propose links into the XML schema used by the Department of Justice for posting legislation.  This would allow closer integration between proposed changes and existing legislation.  Without needing to implement an XML or other machine-readable solution, TBS could start by centralizing the hosting of Forward Regulatory Plans and require submission from departments in a strict format to allow easy importing into a database.
  • As we begin to use Consulting with Canadians more often, we should ensure that consultation opportunities are linked to in the FRP AND that the consultation on Consulting with Canadians links back to the FRP.
  • We should “close the loop” on FRPs, updating them to identify them as published, cancelled, etc.  Initiatives could be viewed by status and there would be a historical record of an agency or department’s planning versus actual performance improving accountability.  Additionally, when regulations are published, the Forward Regulatory Plan could be updated with a link to the published changes.
  • Going forward we should look at creating virtual “dockets” as with the US model where all details about a regulatory initiative from early planning, through implementation and including ex-post facto review are viewable in one place.

Conclusion

Canada is doing exceptionally well with regards to regulatory transparency, the OECD ranked Canada 3rd for Stakeholder Engagement and Transparency in developing subordinate legislation in 20154 behind only Mexico and the United States.  That majority of my suggestions revolve around improving the accessibility and transparency through the adoption of technology that would vastly improve the user experience.  As regulators we often focus on the known stakeholder groups.  Our goal should be to ensure that everyone who might be impacted, or even interested in potential regulatory changes is able to quickly and easily identify planned regulatory initiatives.

I’m interested to hear any comments or thoughts you have on our current model, my assessment and recommendations, or anything else related to forward regulatory planning. The next post in my series covers the One-for-One Rule.

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Budget 2017 – Commitment to Regulatory Modernization

February 27th was a great day for policy wonks and regulatory modernization enthusiasts across Canada.  The Government of Canada proposed in Budget 2018 to “provide $11.5 million over three years, starting in 2018–19, for the Government to pursue a regulatory reform agenda focused on supporting innovation and business investment.”1.

This extraordinary commitment to modernizing Canada’s regulatory regime is unprecedented during my decade in regulations.  While Canada consistently ranks near the top of OECD rankings of regulatory regimes, we all know there are ways that we can make things less burdensome, more agile, and responsive to the increasingly dynamic landscape we’re regulating.

The changes stem from three priority areas identified in the December 2017 report of the Advisory Council on Economic Growth “for establishing an agile regulatory system designed for the new economy”2:

  • Catalyze innovation across the economy through regulations that accommodate emerging technologies and business models, especially in high-potential sectors.
  • Drive coordination between agencies and jurisdictions, both within Canada and internationally.
  • Promote efficient and predictable regulation.

In response to these three priorities, the Budget put forward the following approaches3:

  • Targeted reviews, over the next three years, of regulatory requirements and practices that are bottlenecks to innovation and growth in Canada, with an initial focus on agri-food and aquaculture, health/bio-sciences, and transportation and infrastructure, including emerging technologies such as autonomous vehicles.
  • Canada’s leadership on internal trade at the Canadian Free Trade Agreement Regulatory Reconciliation and Cooperation Table.
  • Developing an e-regulation system—an online platform modelled on the successful U.S. Office of Information and Regulatory Affairs website Regulations.gov—to engage Canadians on regulation in order to improve the transparency and efficiency of the overall rule-making process.

To best understand how to enact reforms which will catalyze and support innovation while increasing regulatory coordination, the first point is essential.  Canada, and indeed, the world’s, regulatory system is growing increasingly more complex every day.  A thorough review with targeted assessments of individual regulatory system components would be essential before proposing changes.

I have the least experience with the second bullet, but I can see how continuing our current trajectory of increased focus on regulatory coordination and cooperation will only benefit the Canadian regulatory system and reduce burden on businesses.

The final point has been one of my passions for several years now.  I am very excited to see the development of a single window into Canada’s regulatory system.  I have long advocated having everything from forward regulatory plans, to notice of intent, to consultation opportunities, to summarized feedback, to initial and final publications and retroactive regulatory review all in one location.  This would vastly reduce the burden of determining what regulations may impact businesses, especially in industries without a strong stakeholder association.  Additionally, it would allow clustering of regulatory initiatives by subject matter, thus breaking down the existing departmental regulatory silos.  You could look up changes occurring to import regulations for plants or food and see changes happening at the Canada Border Services Agency, Canadian Food Inspection Agency, and Health Canada in one location.

Needless to say I will be following the work of the team assembled to tackle this important task closely.  We have amazing regulators in Canada and strong fundamental basis for undertaking this modernization effort.  I strongly believe that we are on the cusp of being one of the world leaders in regulatory innovation and transparency.

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Review: “Simpler: The Future of Government” by Cass Sunstein

Book cover for "Simpler: The Future of Government by Cass R. Sunstein"I had the great fortune to attend a bootcamp ran by David Sevigny and Marcel Chiasson at the Institute on Governance this past Spring.  Prior to this, I had been following the interesting behavioural economics implementations of our colleagues across the pond in the UK and the success they had been seeing.  During the talk, Cass Sunstein, the former director of the US Office of Information and Regulatory Affairs (OIRA) came up.  During his time as director of OIRA, he became the champion for behavioural or “nudge” economics within the regulatory regime of the United States. At this point, I had already read “Nudge: Improving Decisions about Health, Wealth, and Happiness” which Sunstein wrote with Richard Thaler, but hadn’t really delved into any practical examples of the applications in regulatory development.

Simpler: The Future of Government” is part autobiography, part theory, and part success stories.  If you’ve read Nudge, then a good half of the book will seem repetitive as it lays out the basics of behavioural economics.  Sunstein’s work on choice architecture (covered broadly in both books) is further discussed in his interesting paper “Impersonal Default Rules vs. Active Choices vs. Personalized Default Rules: A Triptych” for anyone wanting a more in-depth look.

The book lays out how Sunstein was tasked by President Barack Obama to bring this modern thinking to the American regulatory regime to increase the effectiveness of regulatory initiatives with alternative and, often much lower-cost, options.  The push to using choice architecture and “nudges” in place of mandates, penalties, and fines lead in many cases (with examples listed in the book) to effective regulatory compliance at much lower cost.

Sunstein is also a huge proponent (as are most modern economists and regulators) in cost-benefit analysis as a mandatory component of modern regulatory design.

“In the Obama administration, we placed a great deal of emphasis both on cost-benefit analysis and on maximizing net benefits. Indeed the net benefits of our regulations, through the first three years, were more than twenty-five times those in the comparable period in the Bush administration, and more than six times more that those in the comparable period in the Clinton administration.” (33)

In Canada, the Cabinet Directive on Regulatory Management mandates the investigation of costs and benefits (qualitative and quantitative (including non-monetary)) with varying levels of rigour dependent on the impact of the regulatory proposal.  I think this emphasis on ensuring that practical cost-benefit analysis outranks any dogmatic or politically driven goals is the standard by which a modern regulatory regime should be based.

I would highly recommend this book for people with very little understanding of behavioural economics and/or the regulatory regime of the United States.  The book provides a great overview of the regulatory system, the changes implemented by Mr. Sunstein, and the general principals of behavioural economics in good regulatory design.  If you’ve read Nudge, I would say about half the content of the book is covered (and sometimes more clearly) in Nudge.  Also, a portion of the book deals with the political difficulties Cass Sunstain faced during his appointment as Director of OIRA and really doesn’t add a lot of value to the book.

What I did enjoy thoroughly were the great examples of success stories where behavioural economics has achieved policy objectives with greater benefit, lower cost, or, in many cases, both.  These are really easily digestible success stories and help to invigorate discussion about how more of these techniques could be used within Canada’s regulatory system.

If you’d like to borrow my copy, please do not hesitate to contact me, I’d be happy to lend it to you.

 

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Mid-term Self-assessment on Open Government Action Plan 2014-16

The Open Government team at Treasury Board of Canada Secretariat have released the draft “Mid-term Self-assessment on Open Government Action Plan 2014-2016,” seeking comments from “Canadian businesses, citizens, academia, and civil society.”

My initial read-through shows that the report is conservative with regards to the successes of the group, representing a very fair overview of the progress against the Action Plan.

I am particularly interested in following the progress on deliverable 6 of the Open Information Core Commitment:

Provide consolidated, searchable access to regulatory information from federal departments and agencies involved in regulatory activities

This aligns with my current interests with regard to accessibility and centrality of Canada’s regulatory information.  Great work!

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