RESTRICTED
WORLD TRADE G/SPS/W/4
12April 1995
ORGANIZATION(95-0891)
Committee onSanitary andPhytosanitary Measures Original: English/
French
HOW REGULATORS REGULATE:
AGUIDE TOREGULATORY PROCESSES INCANADA
Submission byCanada attheMeeting of29-30 March 1995
TheFederal Government
I. Introduction
1. Every regulation flows fromaparticular ActofParliament. Collectively, regulations areknown
as"delegated" or"subordinate" legislation because theygaintheirlegalstatus fromoneormore Acts
ofParliament.
2. TheStatutory Instruments Act1(SIA) defines "regulations" anddictates thelegalprocess for
making them. Itdefines regulations aslegalinstruments:
- thatdepartments andagencies2usetoexercise legislative power theyhavebeengiven
under anActofParliament;
- thatgovern judicial orquasi-judicial processes; or
- thathavethepotential toeither significantly "regulate" behaviour (i.e., change the
waypeople dothings, orsignificantly affect theeconomy.
Procedural requirements -some highlights
TheStatutory Instruments Actalsoestablishes thebasiclegalprocess thefederal government mustfollow
indeveloping regulations. Among therequirements (with certain minor exceptions) arethefollowing:
- ThePrivy Council Section oftheDepartment ofJustice must examine proposed
regulations toassess theirlegality (particularly withrespect totheCharter ofRights
andFreedoms) .
- Regulations mustberegistered withtheRegistrar ofStatutory Instruments within seven
daysofbeing approved.
- Thegovernment must publish itsregulations intheCanada Gazette ,PartII,within
23daysofregistration.
- Regulations become lawassoonastheyhavebeenregistered. However, theycan
beenforced onlyaftertheyhavebeenpublished intheCanada Gazette, PartII,or
afterthegovernment hasdirectly notified those whom theregulations willaffect.
1R.S.C., 1985, C.S-22
2"Agencies" refers toCrown corporations, boards andother organizations thatmake regulations
onbehalf ofthefederal government.G/SPS/W/4
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II. Regulatory Policy andProcess -General Goals andPrinciples
3. In1986, thefederal government introduced certain requirements covering thepolicy andprocess
formaking regulations, andaminister wasmade responsible forregulatory affairs. Broadly speaking,
theserequirements reinforce thegovernment 'scommitment totheprinciples offairness andeffectiveness
andhadthefollowing goals:
- toimprove thewaythegovernment wasmanaging thefederal regulatory process;
- tohelpministers control theregulatory process more effectively;
- toallow thepublic tobecome more involved infederal regulatory activities; and
- tomake regulations moreeffective andequitable, andplacetheleastpossible regulatory
burden ontheeconomy andsociety.
4. Theheartofthispolicy wasexpressed intheformoftheCitizen 'sCode ofRegulatory Fairness.
TheCode committed thefederal government tocertain principles vis-à-vis regulation:
- tointerfere aslittleaspossible withindividual freedoms, while protecting theinterests
oftheCommunity;
- toenable individuals, businesses andothergovernments toprovide inputintothefederal
regulatory process:
- tofullyexplain regulations andtheireffect inclear language;
- toensure thatregulations donotaffect particular people orgroups unfairly;
- tomatch thepenalties fornotcomplying withregulations withtheseriousness ofthe
violations;
- toensure thatthedecisions ofregulatory agencies anddepartments aremade inan
efficient, prompt andpredictable manner; and
- toregulate onlywhen there isclear evidence thataproblem exists, government
intervention isjustified, regulation isthebestalternative, andthebenefits exceed costs.
Administering theprocess
5. InFebruary 1991, thegovernment designated thePresident oftheTreasury Board ofCanada
asminister responsible forRegulatory Affairs.
6. TheRegulatory Affairs Directorate oftheTreasury Board Secretariat (TBS) isresponsible for
ensuring thatdepartments andagencies follow thegovernment 'sregulatory policy. TheDirectorate
monitors regulatory proposals from departments andagencies forconsistency withpolicy andtries
tohelpthemdevelop thebestpossible regulations, ordevise alternatives thatmeetthesameobjectives.
III. Theapproval process
7. Theprocess ofmaking aregulation starts when adepartment oragency authorized byParliament
tomake regulations decides thataregulation isnecessary. Aregulation fallsintooneofthreecategories:
- Governor-in-Council (GIC) regulations (most regulations fallintothiscategory);
- Ministerial Regulations (regulations thataminister isauthorized tomake under anAct);
and
- GICorMinisterial Regulations thatdirectly affect thegovernment 'sspending.
8. Theprocess described onthefollowing pages applies totypical GICregulations. Asnoted
above, GICregulations account formostregulatory activity. Theprocess forMinisterial RegulationsG/SPS/W/4
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andregulations thathavetobeapproved (asopposed tomerely being reviewed) bytheTreasury Board
varyslightly, asdescribed onpage5.
Planning
9. Through theannual Federal Regulatory Plantheoriginating department canindicate thatit
plans tomake aregulation. (Seealsopage6.)Partoftheplanning process includes scrutinizing a
proposed regulation toassess whether itisnecessary orifthereissome other waytoachieve itsplanned
objective. (Note thatpartofthefederal government 'sregulatory policy istoreduce theamount of
regulation.)
Drafting theRegulation
10. Thedepartment thatoriginates theregulation isresponsible fordrafting it.Theoriginating
department alsodrafts aRegulatory Impact Analysis Statement (RIAS), which explains thepurpose
oftheproposed regulation, thealternatives considered andtheexpected effects. Italsosummarizes
theresults ofconsultations withinterested parties andoutlines thedepartment 'sresponses toconcerns
raised.
Submission
11. Thedeputy minister oftheoriginating department sends theproposed regulation andsupporting
documentation totheheadofthePrivy Council Section oftheDepartment ofJustice. Acopyisalso
senttotheRegulatory Affairs Directorate oftheTreasury Board Secretariat andthePrivy Council
Office.
Review bytheCentral Agencies
12. Theterm"centralagencies"referstotheTreasuryBoardSecretariatandthePrivyCouncilOffice.
They review theregulation, theRIAS, andthecommunications planfortheregulation.
Review bytheSecretariat
13. TheSecretariat reviews allproposals against thefollowing criteria:
- Theregulation must notimpede thegovernment 'soperations.
- Theregulation must contribute tomeeting thegovernment 'sobjectives, rather than
merely adding totheproliferation ofregulations.
- Alternatives havebeenconsidered.
- Thebenefits clearly outweigh social andeconomic costs.
- There hasbeenadequate consultation withthepublic toallow people tounderstand
theproposed regulation andparticipate intheprocess.
- Theoriginatingdepartmenthasco-operatedwiththeprovincestohelpensurethatfederal
andprovincial regulations donotduplicate andoverlap witheachother, sothatthe
regulatory burden onCanadians iskepttoaminimum.
Review bythePrivy Council Office
14. ThePrivy Council Office alsoreviews proposals tosatisfy itself thattheymeetthefollowing
requirements:
- They mesh withgovernment initiatives inthebroad sense.G/SPS/W/4
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- Theoriginating department hasadequately considered thecommunications aspects of
theproposed regulations.
- Theproposals willbeconsidered bytheappropriate committee ofCabinet (usually
theSpecial Committee ofCouncil).
15. Inaddition,thePrivyCouncilOfficeSectionoftheDepartmentofJusticemustexamineproposed
regulations toensure thattheyhaveaproper legal basis, particularly withrespect totheCharter of
Rights andFreedoms.
Ministerial Approval
16. Thesponsoring department 'sminister approves theregulation andsupporting documentation
andsubmits bothtothePrivy Council Office (Order-in-Council Section) forconsideration bytheSpecial
Committee ofCouncil (SCC).
17. Usually, thePresident oftheQueen 'sPrivy Council chairs theSCC. Atthemoment, however,
itistheGovernment House Leader. TheMinister ofJustice isVice-Chair. TenotherCabinet ministers
sitasmembers oftheCommittee.
18. Theinformation available toministers inmaking decisions onproposed regulations includes
atleasttheRIAS andacommunications plan. TheRIAS describes:
- theobjective oftheregulatory proposal;
- thealternatives toregulation thatwere considered;
- theextent andoutcome ofconsultation;
- thelikely social andeconomic effect iftheregulation isimplemented; and
- themechanisms forenforcing theregulation.
Prepublication
19. Theregulation andtheRIAS arethenprepublished indraftformintheCanada Gazette ,PartI,
topermit further consultation withthepublic. (SeealsoitemIV.)
Final Submission
20. After prepublication, thesponsoring department 'sminister submits thefinalregulation and
theRIAS tothePrivy Council Office forfinalapproval bytheSpecial Committee ofCouncil. The
same typeofinformation isagain provided toCommittee members, asnoted onpage3.
21. IftheSpecial Committee approves it,theregulation willberegistered. Usually theregulation
becomes effective assoon asitisregistered, unless alaterdateisspecified. Long delays after
prepublication could trigger another round ofprepublication.
Registration andpublication
22. Boththeregulation andtheRIAS arepublished intheCanada Gazette ,PartII.Asnoted above,
adepartment cannot enforce aregulation before ithasbeenpublished unless everyone affected has
beennotified directly.G/SPS/W/4
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Parliamentary Approval
23. Finally, theStanding JointCommittee fortheScrutiny ofRegulations reviews allregulations.
Itcanrecommend changes tothegovernment, report toParliament onproblems withregulations that
members oftheCommittee havediscovered, orpropose toParliament thataregulation beoverturned.
Variations intheProcess
24. Theapproval process described above applies toGovernor-in-Council (GIC) regulations. The
twoother kinds ofregulations haveslightly different processes, asexplained below.
Ministerial Regulations:
Forcertain cases, legislation authorizes Ministers oftheCrown toprescribe regulations. For
Ministerial Regulations, Governor-in Council (orSpecial Committee ofCouncil) approval is
notrequired. However, thePrivy council Office Section oftheDepartment ofJustice and
theTreasury Board Secretariat must stillreview proposed Ministerial Regulations.
Regulations thatneedTreasury Board Approval:
Ministerial andGICregulations mustbesubmitted totheTreasury Board iftheyinvolve direct
financial implications. Forexample, aregulation involving imposing anewuserfee(orraising,
lowering oreliminating anexisting one)would directly affect government revenues. Therefore
itwould normally require theTreasury Board 'sapproval. Note, however, thataGICregulation
(butnotaMinisterial Regulation) mustbesubmitted totheSpecial Committee aftertheTreasury
Board hasapproved it.
IV. Notifying andConsulting withthePublic
25. Long before aregulation isconceived, active discussion often takes place between thepublic
andtheoriginating department. Infact,itisoften groups orindividuals whocallthegovernment 's
attention tomatters thatmight needregulating inthefirstplace.
26. Similarly, discussions takeplace about anexisting regulation thatmight needtobechanged.
These discussions maybebased onpastexperience withtheregulation. Forexample, theymight focus
onwhyithasorhasnotworked, orhowitcould beimproved ormade unnecessary.
27. Onceadepartment oragency hasdecided toregulate, theprinciples offairness andeffectiveness
require thataconsultative process befollowed. Thefederal consultative process isoutlined below:
- Adepartment canprovide anearly indication thatitintends toregulate byincluding
aproposal intheannual Federal Regulatory Plan published byTreasury Board
Secretariat eachDecember. Including theregulation inthePlandoesnotnecessarily
indicate thatthedepartment willbeproceeding withitthatyear.
- Anydepartment canpublish a"Notice ofIntent" toregulate, signed bytheMinister,
intheCanada Gazette ,PartI.Suchnotices invite participation attheoutset, andrequest
data, technical specifications, expert commentary, andother information thatwould
helpdefine issues relating toanyproposed regulation.
- Interdepartmental andintergovernmental consultations areencouraged.G/SPS/W/4
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- Departments havetheirownmechanisms forconsulting withthepublic onproposed
regulations. Newsletters, consultative committees, informal discussions, etc.,areall
used. Suchconsultation isdocumented andincluded intheformal Regulatory Impact
Analysis Statement (RIAS), explained earlier onpage3.
- Thedraft regulations andRIAS thengototheSpecial Committee ofCouncil for
approval toprepublish.
- Draft regulations andRIAS areprepublished intheCanada Gazette ,PartI,atleast
30daysbefore theygobefore theSpecial Committee forfinalapproval. (Seealso
ItemIII,Prepublication .)Iftheoriginating department didnotinclude theregulation
intheFederal Regulatory Plan, 60daysisrecommended.
- Usually, most identifiable groups thatmight beaffected bytheproposed regulation
willhavebeenconsulted before theprepublication stage. Nevertheless, prepublication
ensures thattheyallreceive written notice ofthegovernment 'sintentions, havehad
access tothelegal wording oftheregulation, andhavehadafinalopportunity to
comment. Depending onthetypeofresponse andcomments, thedraftregulation could
besubstantially changed (orevenwithdrawn) andtheprepublication process repeated.
28. Inanycase, theRIAS willhavebeenmodified forfinalpublication toreflect thecomments
received asaresult ofprepublication. Included isaresponse orfeedback tothose whohavecommented
earlier.
29. Regulations subordinate totheCanada U.S. Free Trade Agreement ortheCanadian
Environmental Protection Actmustbeprepublished for60daysbefore being submitted totheSpecial
Committee ofCouncil forfinalapproval. Regulations affecting standards thatproducts must meet
mustbeprepublished foraminimum of75days, andCanada 'strading partners mustbenotified through
theWorld Trade Organization (WTO) Enquiry Point attheStandards Council ofCanada.
V. Evaluating Regulations
30. Government policy states thatdepartments mustevaluate theirregulatory programmes asthey
would anyothers, i.e.,these programmes aretobeevaluated forefficiency andeffectiveness atleast
onceevery seven years.
31. Certain events could alsotrigger anevaluation. Forinstance, areview policy could affect
theregulations associated withthatpolicy. TheAuditor General could alsoidentify aregulatory
programme thatneeds tobeimproved.