Identifier
Created
Classification
Origin
05OTTAWA418
2005-02-10 14:35:00
UNCLASSIFIED
Embassy Ottawa
Cable title:  

SMART REGULATION IN CANADA: IMPLICATIONS FOR

Tags:  ECON ECIN ETRD 
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UNCLAS SECTION 01 OF 02 OTTAWA 000418 

SIPDIS

OMB PASS TO JOHN MORRALL III

E.O. 12958: N/A
TAGS: ECON ECIN ETRD
SUBJECT: SMART REGULATION IN CANADA: IMPLICATIONS FOR
CANADA AND THE NORTH AMERICAN INITIATIVE

REF: 04 OTTAWA 3431

Summary: As we go forward with plans to integrate further
our North American economies, Washington agencies should
realize that there is little tradition, much less practice,
of cooperation within Canadian federal agencies or between
federal, provincial, and local governments in most aspects of
regulatory processes. GOC efforts to coordinate regulations
are only now getting started, and we envision that any
progress is likely to be incremental and gradual. End
Summary.

UNCLAS SECTION 01 OF 02 OTTAWA 000418

SIPDIS

OMB PASS TO JOHN MORRALL III

E.O. 12958: N/A
TAGS: ECON ECIN ETRD
SUBJECT: SMART REGULATION IN CANADA: IMPLICATIONS FOR
CANADA AND THE NORTH AMERICAN INITIATIVE

REF: 04 OTTAWA 3431

Summary: As we go forward with plans to integrate further
our North American economies, Washington agencies should
realize that there is little tradition, much less practice,
of cooperation within Canadian federal agencies or between
federal, provincial, and local governments in most aspects of
regulatory processes. GOC efforts to coordinate regulations
are only now getting started, and we envision that any
progress is likely to be incremental and gradual. End
Summary.


1. (U) Following the September 2004 report on Smart
Regulation (www.smartregulation.gc.ca),the Privy Council
Office's group for Implementation Strategy for Smart
Regulation is gearing up to put principle into practice. PCO
plans to propose a number of new initiatives to improve the
quality and responsiveness of Canada's regulatory apparatus.
PCO hopes for improved coordination, at least at the federal
level, early on as "Smart Regulation" approaches are applied
to new regulatory projects. PCO also views Smart Regulation
as a component of NAI. Action request: see last paragraph. .


2. (U) Members of Post's Econ section met with the Executive
Director of PCO's Smart Regulation implementation committee,
Julia Hill, and staff to discuss the future of Smart
Regulation in Canada. In 2002, GOC invited the OECD to
review the Canadian regulatory system; the OECD report
recommended "more systemic and strategic review." In
response, GOC created the External Advisory Committee on
Smart Regulation (EACSR) in 2003 and requested private input;
the committee then presented its report in September 2004.
The report showed that Canada's regulatory approach is
fragmented (within jurisdictions, regions and sectors),
focuses too much on short-term issues, burdens industry with
complexities and inconsistencies, reduces transparency
because of incomplete information and reporting, and lacks a
strategic international approach. PCO officials told us that
the government has clearly gotten the message; when Treasury
board chief Reg Alcock held his first organizational meeting
on implementing smart regulation, the entire Cabinet showed
up.


3. (U) PCO's Smart Regulation implementation committee is
considering a number of ways to "make regulation a key

contributor to improved Canadian quality of life". In
general, Smart Regulation implementation is still very much
in the planning stages. The Smart Regulation group's
primary goal is to "target thematic areas and approaches to
improve process and results." Measurable results may include
life-cycle reviews of regulations, regular reporting on
actions and plans, and improved
Federal/Provincial/Territorial cooperation. PCO wants to see
new regulatory initiatives based on international best
practices, such as peer review, international and local
sources of knowledge, and systematic life-cycle review of
regulations, as well as improved responsiveness to the public
comments which are already required to be solicited for new
regulations. In March, PCO intends to publish its first
"Report on Actions and Plans", which will serve as a forum to
notify the public of issues in the very early states of
regulatory consideration (i.e. before regulations are
drafted) and to request earlier comment. The GOC is also
developing a website for one-stop shopping for Canadian
regulatory issues, similar to the U.S. www.regulations.gov.


4. (U) PCO is also beginning to convene interagency groups
centered on a series of themes: healthy Canada,
environmental sustainability, public safety and security,
innovation, productivity and business environment, and
aboriginal and northern prosperity. The objective is to
break down a number of existing walls, including departments'
traditional practice of developing regulations in house with
ad hoc or minimal interagency consultation, and inadequate
coordination with and among provinces, as well as offering
guidance to new regulators in territorial governments. One
intangible benefit, PCO hopes, is the "ah ha!" factor, that
moment when an obvious realization is made obvious by the
fact that people have had a chance to see the topic from a
different angle. At the moment, British Columbia is chairing
a provincial working group on eliminating excessive
regulation (a theme on which the current provincial
leadership campaigned.) PCO is also in the early stages of
developing a framework for the EACSR's
proposed public-private "SWAT teams"; possibly one of the
first trials will be a group set up to recommend implementing
regulations for Canada's new ban on trans fats.


5. (U) Smart Regulation officials are also looking at
developing more coherent criteria for Regulatory Impact
Analyses (RIAs) comparable to those required under U.S. law.
Post's informal review of a number of recent proposed
regulations in Canada's Gazette 1 suggests that Canadian RIAs
currently vary widely in scope and depth; some clearly
estimate costs and benefits of various proposed options, with
assumptions explicitly stated, while others are more
perfunctory. When asked if Canadian RIAs would be required to
provide more detailed analysis, Ms. Hill suggested that her
office may be looking at something less rigid than a
check-list; Canadian officials are aware of the potential for
controversy generated by cost-benefit analysis of human
safety and health regulations.


6. (U) Life cycle review is another element PCO hopes to
incorporate into its rulemaking process. While there is no
clear framework yet, life cycle review could include sunset
clauses in new regulation as well as scheduled sectoral
retrospectives to clear out obsolete regulations - especially
in provincial statutes, which include, as Ms. Hill noted, one
limiting the depth of horse manure on municipal streets.
Above all, PCO is trying to ensure that the approaches
recommended by the EACSR are incorporated into current
regulatory projects. Both ministers' communications staff
and PCO's existing regulatory analysis staff are responsible
for reviewing pending regulations to ensure that they meet
smart regulations criteria.


7. (U) PCO is eager to increase regulatory cooperation
between Canada and its trading partners, particularly the
United States. (Comment: regulatory cooperation is on
Canada's agenda for its relations with both China and the
European Union. End comment.) Despite the External Advisory
Committee's call for maximum North American harmonization,
however, Ms. Hill made clear that national differences will
persist, using as an example the fact that automobile bumpers
in Canada are required to be lower since Canada has a greater
number of subcompact cars than the United States.


8. (U) One "ah ha!" moment mentioned by Ms. Hill that has
great potential for regulatory streamlining is uniquely
Canadian, arising from the GOC's official bilingualism.
According to Ms. Hill, if after a regulation is enacted it is
discovered that the official translations differ, even
slightly, the entire process must be run through again, with
proposed changes, comment, and final publishing of the "new"
regulation. Ms. Hill said that one of her office's goals is
to make it possible for minor translation discrepancies to be
addressed without the lengthy notice and comment period and
full-dress Ministerial review, allowing Ministers to focus on
substantive changes.


9. (U) The Smart Regulation group intends to encourage
participation from stakeholders across the value chain
(citing the agricultural regulatory models that work "gate to
plate, farm to fork"),from provincial and territorial
governments, and from private-sector and academic experts.
In March 2005, the first of GOC's biannual "Report on Action
and Plans" should be published, and over the next fiscal year
the Smart Regulation group plans to review and modernize the
regulatory government framework.


10. (U) Comment: Post believes that this process can
potentially offer opportunities to address some of the
nagging regulatory disparities, such as baby food jar
restrictions and duplicative marine safety certification
requirements, that have proven to be trade irritants.
Washington agencies may want to share with us any complaints
about regulatory barriers not already on the table so that we
can bring them to PCO's attention. End Comment.

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