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### Viewing cable 05OTTAWA418, SMART REGULATION IN CANADA: IMPLICATIONS FOR

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05OTTAWA418 | 2005-02-10 14:02 | 2011-04-28 00:12 | UNCLASSIFIED | Embassy Ottawa

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    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.

    Visit Canada's Classified Web Site at
    http://www.state.sgov.gov/p/wha/ottawa

    CELLUCCI

`