Ot­tawa con­sid­ers adding ‘ef­fi­ciency and eco­nomic growth’ to reg­u­la­tory regime

Morneau promises re­view of leg­is­la­tion that gov­erns de­part­ments and agen­cies

Calgary Herald - - FINANCIAL POST - JESSE SNY­DER Fi­nan­cial Post js­ny­[email protected]­media.com Twit­ter: jesse_s­ny­der

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 slow-mov­ing 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 how fed­eral de­part­ments and agen­cies craft 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 to in­clude some level of re­lief on taxes and reg­u­la­tions.

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 near­record 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 so-called “Cen­tre for Reg­u­la­tory In­no­va­tion.” The cen­tre will in­clude “sand­boxes” where new tech­no­log­i­cal sys­tems can be tested be­fore be­ing adopted by var­i­ous de­part­ments and agen­cies.


Com­pa­nies in sec­tors span­ning the coun­try — in­clud­ing the oil­sands — have for years be­moaned Canada’s reg­u­la­tory regime.


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