Ottawa regulation review would include ‘competitiveness considerations’

OTTAWA • The federal government said Wednesday it could soon require regulators to consider “efficiency and economic growth” in their mandates, potentially marking a fundamental shift in how business regulations are crafted in Canada.

The possible change comes in response to business community concerns that Canada’s complicated and slowmoving regulatory regime has caused private sector investment to wane in recent years.

As part of the government’s fall economic statement Wednesday, finance minister Bill Morneau promised to review the existing legislation that governs the crafting of regulations for everything the government does, from food safety inspections to approving applications to build pipelines.

He will consider a potential update to that legislation that would effectively require those departments and agencies to include “competitiveness considerations” when they’re drawing up rules. The current legislation, by comparison, is almost exclusively focused on health, safety and environmental considerations.

Morneau said the review would take place this fall.

“Enshrining this requirement in legislation would ensure that the economic impacts of new, revised or cumulative regulations are key considerations for regulators,” finance officials wrote in the fiscal update document.

In addition, Ottawa will spend $10 million over three years to assist various government departments as they begin to account for such business and economic considerations, aimed at ensuring they can “keep pace with the new requirements.”

The document included few details on exactly how regulations might be redesigned to better address business interests, and so the long-term effects of Morneau’s statement remains unclear. But his efforts could go some way toward placating industry groups and their members, who for months had been pressing him for months to include some level of relief on taxes and regulations.

Perrin Beatty, head of the Canadian Chamber of Commerce, applauded the promised regulatory overhaul, saying it could create more “balanced” guidelines for businesses in the long term.

“This is substantive, it’s not window-dressing, and it’s going to have an impact,” he said.

“There seems to be a genuine commitment on the part of the government to actually bake into the system profound reforms as to how reforms are done.”

The measures are perhaps the most comprehensive attempt yet to update Canada’s regulatory environment. Companies in sectors spanning the country — from the oilsands to financial services to auto manufacturing — have for years bemoaned Canada’s regulatory regime, claiming it is overly complicated and sclerotic, putting firms at a disadvantage to foreign rivals.

Those concerns are perhaps most acute in the oil and gas sector, where midstream companies have failed in recent years to build major pipelines to get their product to market.

That has forced Canadian oil producers to accept a near-record discount for their product over the last few months, effectively erasing hundreds of millions of dollars in foregone revenue.

Concerns over regulatory delays reached a fever pitch after Ottawa effectively nationalized the Trans Mountain pipeline in August, purchasing the project from its Houston-based owner for $4.5 billion as part of an attempt to ensure an expansion of the project would be built.

In the fiscal update the government acknowledged that “regulations can accumulate, become outdated, and result in unnecessary barriers to innovation and economic growth.”

Morneau also stipulated Wednesday that Ottawa would introduce a “regulatory modernization bill,” introduced in 2019 and to be reviewed on a yearly basis, to remove “outdated or duplicative” regulatory requirements faced by Canadian businesses.

It will also create an external advisory committee, chaired by representatives in the business sector, to advise government on potential policy changes.

In addition, it will spend up to $11.4 million over five years, and $3.2 million per year thereafter, on a socalled “Centre for Regulatory Innovation.” The centre will include “sandboxes” where new technological systems can be tested before being adopted by various departments and agencies.