Notice to Readers
The consultation period on this draft has now closed. We are considering all input when finalizing the draft Cabinet Directive on Regulation. Thank you for your participation.
At the beginning of the regulatory lifecycle, departments and agencies determine the approach to address an issue, set objectives, undertake consultations with stakeholders, and analyse the risks, impacts, and costs and benefits of a regulatory proposal, in accordance with applicable policies, guidelines, and good regulatory practices.
5.1 Determination of regulatory approach
5.1.1 Issue identification
Departments and agencies are responsible for identifying public policy issues to be addressed. This includes outlining risks to health, safety, security, the economy, and the social and economic well-being of Canadians and the environment and demonstrating through the best available evidence and analysis that government intervention is needed.
Where there are threats of serious or irreversible damage or harm, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent harm.
5.1.2 Instrument choice
Departments and agencies are responsible for assessing the effectiveness and appropriateness of regulatory and non-regulatory instruments for achieving policy objectives. Departments and agencies should demonstrate that they have considered relevant domestic and international best practices as part of the instrument choice exercise. Where relevant best practices exist, regulators should seek to identify opportunities to cooperate or align, in order to avoid or reduce duplication or unnecessary burden.
When appropriate, the results of an instrument choice exercise should be included as part of the Regulatory Impact Analysis Statement to demonstrate through evidence and analysis that a regulation is the best tool to achieve the desired public policy objectives. It should also begin to examine the costs and benefits of regulatory options to inform this decision.
Departments and agencies should seek to design outcome-based or performance-based regulations, when appropriate, with a view to minimizing the amount of regulatory burden imposed on businesses and Canadians.
Outcome and performance-based regulations specify the desired result that a regulation intends to achieve, rather than a prescriptive description of compliance. This type of regulation increases flexibility for regulated parties as well as departments and agencies, and requires the regulated communities to focus on achieving specific and measurable outcomes.
5.1.3 Forward regulatory plans
Departments and agencies should provide advance notice to Canadians and stakeholders on upcoming regulatory changes over a period of 24-month so stakeholders can engage in regulatory development and plan for future regulatory changes at the earliest opportunity.
Advance notice is given on an annual basis which outlines departments’ and agencies’ plans for new regulations, regulatory amendments, repeals, and stock reviews. Regulatory proposals should be included on a forward regulatory plan before being pre-published in the Canada Gazette, Part I.
5.1.4 Consultations prior to pre-publication
Departments and agencies will consult when appropriate and engage potentially impacted stakeholders, Indigenous people, including all partners with whom the Government of Canada has a formal regulatory cooperation arrangement, during the development of a regulatory proposal. Departments and agencies are responsible for determining the size and scope of the consultations or engagement. Publication in the Canada Gazette, Part I, that is, in other words pre-publication, is not a substitute for early consultation.
Departments and agencies should not postpone pre-publishing a proposal in the Canada Gazette, Part I, in the absence of unanimity of views from stakeholders. Rather, consultations and engagement with stakeholders and Indigenous people on a regulatory proposal should be viewed as an ongoing dialogue, with consultations or engagement before pre-publication identified as an important, but not the only tool to seek stakeholder input.
5.2 Regulatory impact analysis (RIA)
Departments and agencies must conduct a Regulatory Impact Analysis (RIA) on all regulatory proposals, to support stakeholder engagement and evidence-based decision-making. In conducting RIA, departments and agencies will comply with relevant Acts, regulations, Treasury Board policies, and adhere to guidance, tools, and directives, and will engage with the Regulatory Affairs Sector at Treasury Board of Canada Secretariat (TBS).
Regulatory Impact Analysis (RIA) is the systematic approach to the identification and critical assessment of the potential positive and negative effects and implications of a regulatory proposal for consideration by the public, stakeholders and Cabinet. It is an important element of evidence-based decision-making.
RIA must examine potential positive and negative effects of a regulatory proposal on the health, safety, security, social and economic well-being of Canadians businesses, and the environment. RIA should include qualitative and quantitative analysis that is proportional to the expected impacts of a regulatory proposal. Departments and agencies must conduct an early assessment, known as a Triage, of a regulatory proposal to determine its expected impact level and the appropriate mix of analytical requirements of the following elements:
5.2.1 Analysis of Benefits and Costs
Departments and agencies will examine and quantify the potential positive and negative impacts of a proposed regulation and its feasible alternative options on Canadians, business, governments and the environment, and identify how impacts are distributed across the various parties. When it is not possible to quantify the benefits and/or costs, a rigorous qualitative analysis of costs and/or benefits in support of the regulatory proposal is expected.
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5.2.2 Impacts on the environment
Departments and agencies will undertake an assessment of potential effects on the environment for each regulatory proposal, in accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals.
An assessment of environmental impacts involves examining the scope and nature of the likely environmental effects (positive or negative); the need for mitigation to reduce or eliminate adverse effects or opportunities for enhancement, and the likely importance of any adverse environmental effects, taking mitigation into account. This helps inform the public that environmental factors have been appropriately considered when decisions are made.
5.2.3 Gender Based Analysis Plus (GBA+)
Departments and agencies will undertake an assessment of social and economic impacts of each regulatory proposal on diverse groups of Canadians, in accordance with the Government of Canada’s commitment on implementing Gender-based Analysis.
Gender-based Analysis Plus (GBA+) is an analytical tool used to help identify the impacts of government initiatives on diverse groups of women, men, and gender-diverse people. The “plus” acknowledges that GBA goes beyond sex and gender differences to consider multiple identity factors that intersect to make people who they are (such as race, ethnicity, religion, age, and mental or physical disability).
5.2.4 Minimizing burden on business
Departments and agencies will identify and estimate the cost of administrative burden impacts of regulatory proposals on Canadian businesses, as set out in the Red Tape Reduction Act and the Red Tape Reduction Regulations, with a view to minimizing this burden to the greatest extent possible without compromising the health, safety and security of Canadians, the environment or the economy.
Departments and agencies will also consider the impact of proposed regulations specifically on small businesses to ensure that small businesses do not unnecessarily bear a disproportionate burden when complying with regulations.
5.2.5 Regulatory cooperation
Departments and agencies will analyse the feasibility of minimizing regulatory differences and aligning regulations with other jurisdictions, domestically and internationally. Where differences remain, departments and agencies must provide a rationale for the Canada-specific approach.
5.2.6 Modern treaty implications
Pursuant to the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, departments and agencies will undertake an Assessment of Modern Treaty Implications (AMTI). The law-making authorities and rights of modern treaty partners and self-governing Indigenous groups must be respected when developing and implementing a regulatory proposal. The Government of Canada must also ensure it meets its obligations under Modern Treaties and Self-government agreements. In the event that modern treaty implications are identified, departments and agencies should engage with implicated modern treaty partners and self-governing Indigenous groups on the findings of the AMTI.
5.2.7 International obligations
Departments and agencies will respect Canada’s international obligations in areas such as human rights, health, safety, security, international trade, and the environment. Departments and agencies should also implement provisions related to these obligations at all stages of regulatory activity, including consultation and notification, as applicable.
Departments and agencies must plan for the implementation of the regulatory proposal as part of their analysis. This could include examination of timing, infrastructure requirements (for examples information management and information technology), fund sources, compliance promotion and outreach, training, and enforcement plans. This analysis could also include consideration of evaluation metrics.
5.3 Regulatory impact analysis statement requirements
Departments and agencies will develop a Regulatory Impact Analysis Statement (RIAS) in accordance with the guidelines set out in the Policy on Regulatory Development.
A Regulatory Impact Analysis Statement (RIAS) is a clear, non-technical synthesis of expected impacts of a proposed regulation. It is published in the Canada Gazette with the regulatory text.
5.4 Publication and consultation
5.4.1 Pre-publication and consultation
Departments and agencies will submit a regulatory proposal to be considered by Treasury Board (Governor-in-Council), or the regulation-making authority, for pre-publication in the Canada Gazette, Part I. Pre-publication of a regulation will include the draft legal text as well as a RIAS.
The standard comment period following pre-publication is 30 days unless otherwise prescribed by legislative requirements and international obligations.
A minimum comment period of 70 days may be required for consultations on proposals for new and amended technical regulations that have a significant effect on international trade.
5.4.2 Exemption from pre-publication
Exemptions to pre-publication requirements may be granted by Treasury Board (Governor-in-Council) or the regulation-making authority, when there is no statutory requirement to pre-publish. In cases where a regulatory proposal is not pre-published, a brief rationale for the exemption must be included in the final RIAS, as a best practice. Departments and agencies must consult with the Regulatory Affairs Sector at TBS if they are considering seeking an exemption.
5.4.3 Final publication
In accordance with the Statutory Instruments Act, all approved regulations must be published in Canada Gazette, Part II, after they are made and registered except where exempted under section 15 of the Statutory Instruments Regulations (C.R.C., c. 1509). A Regulatory Impact Analysis Statement must be included along with all published regulations.
5.5 Exceptional measures
Exemptions from certain regulatory development requirements can be granted by Treasury Board (Governor-in-Council) or Cabinet in cases of serious and immediate risk to the health and safety of Canadians, their security, the environment, the economy, internal government reorganizations, or other exceptional circumstances.
Departments and agencies must consult with the Regulatory Affairs Sector at TBS if they are considering seeking an exemption for an exceptional measure.
Q2: In this proposed policy update, we believe your involvement throughout the different stages of the regulatory lifecycle is important. What are your ideas in how you can best inform us of solutions to regulatory problems when designing, implementing and reviewing regulations or regulatory programs? Please explain and provide suggestions for improvement.
For more information, please refer to following sections:
- Section 4.1 “Consultation and Engagement” and sub-sections 4.1.1 and 4.1.2 inclusively
- Section 5.1 “Determination of Regulatory Approach” and sub-sections 5.1.1 to 5.1.4 inclusively
Q3. In this proposed policy update, we place significant importance on showing the impact, cost and benefits of all regulatory proposals. Are there any requirements missing? Please explain and provide suggestions for improvement.
For more information, please refer to section 5.2 on “Regulatory Impact Analysis” and sub-sections 5.2.1 to 5.2.8 inclusively.