5.0 Development of regulations

Agree with the idea that a regulatory ombudsman should be appointed or similar position where issues can be raised in an environment where there are representatives from government other than the regulatory agency that designed the instruments . It would be good to have an eye on the comments made on regulatory initiatives outside of that regulating department - before notices are gazetted. In addition, enforcing the regulatory policy is key. Too many times we see political decisions coming ahead of the regulatory policy - this should not be the case and the real costs and benefits should be transparent to all Canadians. Not all departments look at the costs and benefits - this should be mandatory. We support any efforts to use notice of intent or consultation documents prior to Canada Gazette 1 publication. It would also be interesting to hear the outcome of consultations (so that we can examine all sides and ensure the information provided is accurate) also well ahead of Canada Gazette 1 process.

The proposed cost-benefit/economic assessment is of importance and is fully supported by the CHC. As an example, the PMRA legislation requires an assessment of a pesticide for risks and safety to human health and the environment, and for an assessment of value (or efficacy). The legislation does not require a cost-benefit analysis or an economic assessment of registering or not registering a particular product. Pesticide active ingredients or crop uses are being discontinued through re-evaluation because a cost-benefit analysis or economic assessment is not part of the regulatory decision. For example, the proposed decisions by the Pest Management Regulatory Agency to discontinue most of the general-mode-of-action fungicides (Group-M) did not consider that there will be no alternative products remaining registered that will control pathogen populations that are resistant to many new single-site-mode-of-action fungicides. The widespread occurrence of resistant populations and the inability of growers to control them with remaining control options will have devastating economic impact on growers, and will in fact make the continued production of some crops unsustainable. In addition, CHC recommends a longer pre-publication period, as 30 days is often too short, particularly around Harvest season, and even more so when multiple consultations are taking place. CHC relies on our members to provide valuable input, and with too much overlap and not enough time to stagger our responses, it can result in lack of valuable input. Note, CHC values taking part in all consultations and appreciates the opportunity to comment. We suggest a longer period, at minimum 45 days, but preferably 60 days, again taking in mind circumstances like the harvest season and how many current consultations are on the table.

I would suggest that the 'pre publication' comment period of 30 days is too short, and should be extended for longer, especially if the consultation appears prior to a holiday period, such as Christmas. The exceptional measures element does need further clarifying before it can be commented on further, as it does provide a loophole for an abuse of power, as does the exemption from the need to pre-publish under some circumstances, to be determined. While this might be necessary under extreme measures- there should be very clear and simple guidance available to stakeholders about when this exception can be used. Also- as someone commenting from a business perspective it seems odd that the Departments and Agencies 'will identify and estimate the cost of administrative burden impacts of regulatory proposals on Canadian businesses', as in many cases- many departments and agency staff do not have anywhere near the business training in order to do so 'rigorously', and thus many RIA's underestimate the costs involved of regulations, and overstate the purported benefits. Hence the need for wide consultations with businesses. This way any 'assumptions' that are made can be validated for accuracy. It is also important that the right regulatory tool be used to tackle the problem the government is trying to solve. As such we recommend reviewing the European Commission's Better Regulation "Toolbox", Chapter 7.5, which provides an overview of consultation methods and tools for various types of stakeholders. I would also like to say that businesses need the ability to have private conversations with government regulators- in order to be able to share proprietary data confidentially. Without the ability to do so stakeholder engagement will not be truly effective and open conversations will be hampered and stilted, good data will not be able to be shared freely, and trust between the government and industry will be eroded. I would also suggest that 'transparency websites' such as has been set up for the 'healthy eating strategy' at Health Canada, actually has the unintended consequence of making many stakeholder-government conversations less transparent and open. I would suggest the government decide if true open engagement is more than optics management. In terms of engagement during the regulatory process- generally it has been good for the consultations I've been involved in, but something which is terribly difficult to manage is timing on when new regulations will drop which is important for business planning. This may be incredibly naïve- but if the government could publish a public timeline on regulatory projects as they works its way to CGI it would be much more effective for business and trade to manage. In fairness sometimes the government provides updates, but it isn't done in a consistent way across agencies. I would suggest just creating a template, and putting the information on timings and steps to CG1 up for the public to see on the website. Once something is through CG1- timing is pretty clear and its much more easy to manage business expectations and future planning.

As a default principle, it should be recognized that all research, data and analysis used to develop, administer or evaluate regulations belongs to the Canadian people and should be made public either through open data portals or descriptive statistics published on government of Canada websites. Notwithstanding the foregoing, data should be aggregated or otherwise anonymized in order to provide reasonable, but not excessive, protection for sensitive and confidential information provided by respondents. Where certain aspects of the data (fields, variables, subsets) are collected but not made public, departments should move quickly to publish the reasons, and should conduct a review of data collection in order to potentially remove the burden for collecting aspects of the data that are unlikely to be used.

In Instrument Choice, you mention that outcome and performance-based regulations should be sought when appropriate. This is a great development, since outcome and performance-based regulations have great potential to allow innovation and to achieve results with fewer negative impacts. Have you considered making an explanation for Instrument Choice part of the RIAS requirements, to demonstrate that the instrument selected was based on evidence and that less prescriptive approaches were considered?

Understanding consumer impacts is critical to the success of public policies. Consumers not only benefit from competition, but also drive it, directly impacting on the competitiveness of firms and the productivity of a nation. However, consumers can also bear disproportionate risks and unintended consequences if expert analysis is not provided in the early stages when policies are being developed. Innovation, Science and Economic Development Canada published a brief document encouraging government policy analysts to adopt a consumer impact assessment process when developing policy proposals including regulations https://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02565.html We would encourage TBS to make this type of analysis a mandatory requirement as part of the regulatory impact analysis statement process. The acceptability of notice periods for regulatory change is a function of the level of participation our organization is able to sustain throughout a regulatory review process. Based on current resourcing of consumer groups, every notice period today is excessively short. The solution to this problem will not be lengthening notice periods – it will be improving the capacity of consumer groups to participate in RIAS, so that notice periods become reasonable. Most RIAS today contain exceptionally weak consumer impact assessments. They do not sufficiently engage consumer groups or consumers. Practically speaking, to meet the timelines necessary for the operation of modern government, consumer groups are essential role players on behalf of the heterogeneous interests of consumers. The Consumers Council of Canada has authored two major reports that address themselves to Q2 and Q3 in detail. We would draw your attention to them. They are: Consumer Groups’ Capacity to Assess Potential Consumer Impacts of Policy Proposals http://www.consumerscouncil.com/site/consumers_council_of_canada/assets/pdf/Consumer_Impacts.pdf Options for a 'Sustained Institutional Role' for Consumer Organizations in 'Internal Trade' Harmonization Initiatives http://www.consumerscouncil.com/index.cfm?pagePath=Research/Recent_Reports/Request_for_Internal_Trade_Report&id=72112

Q2 A significant gap exists with the current approach for developing regulations as regulatory interpretation and guidance is generally not developed or published until after a regulation is finalized. As a result, stakeholders, including regulated parties, often lack the information required to fully understand the implications of proposed regulations, including impacts on operations and implementation costs. In addition, over time, guidance documents have been developed that appear to contradict one another and instances of “regulatory creep” have been noted where requirements laid out in guidance documents are not supported by authority in regulations. Current Status: In highly technical regulatory environments, detailed guidance documents are often necessary to ensure the efficient application of regulations and meet policy objectives. These guidance documents are also necessary in order to provide a degree of flexibility that permits regulated parties to comply with government’s intended regulatory outcomes without having their ability to innovate stifled by overly prescriptive regulations. Each department’s approach to the development of such guidance is governed by Treasury Board’s Guide for Developing and Implementing Interpretation Policies (the Guide), which requires them to publish interpretation policies that outline how they will meet the principles of the Guide, including predictability, service, stakeholder engagement, and ongoing improvement. Adherence to these principles in the provision of guidance for existing regulations is intended to: • Ensure consistency in guidance and commitment to plain and clear language; • Serve Canadians with professionalism and provide accurate, timely and respectful service; • Engage stakeholders to identify regulatory requirements that require guidance and in developing such guidance; and, • Seek to improve delivery of interpretation services, based on experience and feedback from Canadians and business. However, guidance documents are frequently only developed after regulations have been promulgated without any assurances that their interpretations/provisions don’t impose additional burden beyond what was anticipated and consulted upon in the regulatory development process. In addition, over time, the proliferation of guidance documents has resulted in inconsistencies between various guidance developed for different aspects of the same regulation/legislation as well as instances where guidance documents impose requirements that are not actually authorized by regulations. Recommendation: Consumer Health Products Canada (CHP Canada) believes that the Federal Regulatory Process should include a requirement to: 1. Identify whether implementation of a proposed regulation would require the creation of a detailed guidance document; and, 2. If it is determined that such guidance would be necessary, publish a draft of the document as part of the Canada Gazette Part I consultation. 3. If guidance documents are amended after regulations are published in the Canada Gazette Part II, and those amendments result in significant additional requirements, departments should be required to re-publish the guidelines for public comment and Treasury Board review/approval. CHP Canada further recommends that departments be required to undertake an internal “audit” of their existing guidance documents to ensure that there are no contradictions between documents and to ensure that all current guidance documents are consistent with existing regulatory authorities. Considerations/Rationale: This proposed approach would provide regulators with an advanced understanding of costs and operational/implementation issues related to regulatory proposals and permit stakeholders, including regulated parties, with the information necessary to provide them with better-informed and more meaningful input. This input would better inform operational planning in relation to implementation of the regulatory proposal, for both regulators and regulated parties. With the insight into the operational impacts of the regulatory proposal gained from prepublication of the draft guidance, a more meaningful assessment of the cost-benefit analysis and other aspects of the RIAS could be made by respondents to the Gazette notice. This would lead to better decision making in the finalization of the proposal. Prepublication of draft guidance as part of Canada Gazette Part I publication of a proposed regulation should not create an additional burden for regulators, as consultation on such guidance is already Treasury Board policy (for those regulations deemed in need of detailed guidance), and must be completed prior to implementation of the final regulation. Instead, prepublication should make the consultation processes for both instruments more efficient and meaningful. For example, publication of draft guidance could help to ensure an appropriate balance between specificity and flexibility in the regulatory proposal itself, by demonstrating a viable compliance approach that is consistent with Cabinet directives and Treasury Board policy. As regulators move to more outcome-based regulations, and reliance on guidance increases, it is important to ensure that proper oversight and review of impact follows the lifecycle of a regulatory instrument. As such departments should not have the authority to make significant changes to guidance that would increase costs/burdens significantly beyond what was approved in the original RIAS without having to seek further approvals from Treasury Board.

Q2 A significant gap exists with the current approach for developing regulations as it relates to the consultation phase for regulatory initiatives. As a result: • Early consultations on regulatory proposals are carried out in an inconsistent manner. • Canadians and other affected parties are often not afforded an opportunity to provide meaningful input into the development of regulations prior to the publication of regulations in the Canada Gazette Part I. • Government regulators are missing out on valuable information to fully inform their understanding and analysis of the regulatory impact and operational issues prior to drafting triage statements, developing regulatory impact analysis statements and commencing the drafting of regulations. • Finite regulatory/drafting resources are utilized inefficiently. The current review by the Treasury Board Secretariat of the Cabinet Directive on Regulatory Management and its related policies, presents an opportunity to address this gap. Current Status: Canada’s formal regulatory process assumes that regulatory departments have adequately consulted Canadians and have properly evaluated their policy and instrument choice options. While less formal consultations may be appropriate at the very early stage of policy development such as when identifying issues, consulting on options, and determining instrument choice, formal consultations on detailed proposals are essential to ensure input is meaningful and informative. For industry, the level of “meaningfulness” of a regulatory consultation correlates directly to the level of detail provided to those being consulted. The current formal regulatory process jumps from the very early publication of forward regulatory plans by departments, which are lacking in any real scope or detail, to Canada Gazette Part I, where regulatory proposals are in a final draft form and where real-world experience of Consumer Health Products Canada (CHP Canada) members suggests that there is little room for fundamental change. While the Cabinet Directive on Regulatory Management is clear that “Publishing proposed regulations in the Canada Gazette is not a substitute for meaningful consultations on the development of regulatory proposals” , there are no other formal, pre-Gazette requirements for consultations. As a result, there exist significant inconsistencies regarding how pre-gazette consultations are carried out, and those consultations often fail to provide sufficient detail to solicit meaningful and useful input. This has significant negative implications for two important stages in the regulatory development process: the drafting of the Triage Statement and the development of the Regulatory Impact Analysis Statement. • The Triage Statement is to be developed at the earliest stage of regulatory design in order to determine the requirements to be met at all stages of the regulatory process. The Triage Statement provides an early assessment of the expected impacts of regulatory proposals and helps determine where approval processes can be streamlined and where analytical resources should be focused. However, these Triage Statements are developed without any public consultation or input and are often based on uninformed and incomplete analyses by departments. • A properly prepared RIAS provides a cogent, non-technical synthesis of information that allows the various RIAS audiences to understand the issue being regulated. It allows audiences to understand the reason the issue is being regulated, the government's objectives, and the costs and benefits of the regulation. It also addresses who will be affected, who was consulted in developing the regulation, and how the government will evaluate and measure the performance of the regulation against its stated objectives. The RIAS is, in effect, a public accounting of the need for each regulation”. However, the RIAS is only made public at the near-final stages of regulatory development when regulations are published in the Canada Gazette Part I. Industry is frequently asked to opine on costs associated with regulatory initiatives based on incomplete and vague policy proposals that are lacking sufficient detail for industry to provide accurate cost assessments. In addition, the Canada Gazette Part I consultation period does not always allow for sufficient time for a thorough assessment of costs. • It is impossible for affected stakeholders to fully engage in a consultation process without sufficient detail. Relatively minor details can result in unnecessary and unintended operational impacts. While publication in Canada Gazette Part I provides an opportunity for valuable input into detailed regulatory proposals, this step should be reserved for refinement of specific sections of regulations, rather than large-scale changes that are often required because department’s have made drafting decisions without being fully informed of the consequences. Recommendation: CHP Canada believes these issues could be mitigated by implementing a formal consultation step prior to publication of proposed regulations in the Canada Gazette Part I. Specifically, we recommend changes to the regulatory process to require the following formal consultation as a pre-condition to getting approval to begin drafting regulations: • Departments be required publish a Notice of Intent (NOI) to Regulate in the Canada Gazette for a 60-day comment period. • The NOI could take the form of an early version of a RIAS and include detailed preliminary drafting instructions upon which stakeholders would be able to provide meaningful and substantial input as to costs, operational issues, implementation issues etc. • The Treasury Board Secretariat (and perhaps even Treasury Board itself) should have a role in reviewing the NOI and approving its publication. • Based on comments received during the pre-consultation, departments should have to obtain agreement of TBS-RAS before being allowed to engage the Department of Justice drafters in drafting the regulations. Considerations/Rationale: This proposed approach would provide regulators with an advanced understanding of costs and operational/implementation issues related to regulatory proposals; it would provide additional rationale for instrument choice, lead to more focused and potentially expedited consultations at Gazette Part I and optimize use of departmental resources including drafting services. Information gathered from consultations on drafting instructions would provide much more detailed and accurate information from all affected parties which could then be used in the drafting of both the Triage Statement (likely preventing the statement from having to be amended during the course of the regulatory development) as well as the RIAS (providing the TBS-RAS and TB Ministers with a far more accurate assessment of the impact of regulatory proposals upon which to base decisions). Given that drafting instructions must be developed by departments anyway in order to proceed with drafting regulations, little additional work would be required to prepare a NOI for early consultations. Any additional effort would be easily offset by the value derived from obtaining more detailed cost assessments and the ability to further refine drafting instructions prior to engaging finite drafting services. In addition, the publication of an NOI with preliminary drafting instructions, would also provide more relevant information to other affected departments for their input as well as allowing TBS an opportunity to ensure that regulatory proposals are consistent with other government initiatives such as Regulatory Cooperation before regulations are drafted. Finally, giving all Canadians an opportunity to provide input on drafting instructions is in line with this government’s commitment to a more open and transparent government and allows for more timely constructive dialogue with Canadians and stakeholders.

FPAC supports current departments efforts to use notice of intent or informal consultation papers prior to Canada Gazette 1 publication. FPAC does recommend that a "what we heard" document be made available to stakeholders as departments are working on proposed regulations text so stakeholders would have a chance to see how their comments from notice of intent or informal consultation were considered. currently, that steps typically only occurs at the proposed Canada Gazette 1 process which is too late.