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Bill S-6, An Act Respecting Regulatory Modernization

 

Hon. Yuen Pau Woo: Honourable senators, I’m pleased to be the sponsor of Bill S-6, An Act respecting regulatory modernization, and to speak to it at second reading.

Bill S-6 has been introduced in this chamber so that we can thoroughly study it on behalf of Canadians. I’d like to thank all of you in advance for your wise counsel on this bill, and I look forward to our collective deliberations.

Businesses are the backbone of Canada’s economic success. They create the goods, services and wealth that have made our country so prosperous. As we emerge from the pandemic and look ahead to the economic recovery, Bill S-6 will help Canadian businesses by ensuring that the regulatory system evolves to keep pace with changing technologies and that it reflects today’s realities.

This bill will make regulatory processes simpler and easier to navigate, moving paper-based or in-person processes online and ensuring Canadian regulations keep pace with international trends.

Specifically, Bill S-6 proposes to modify 29 acts through 46 amendments and it applies to 12 departments and agencies.

While the immediate impact of each proposal is relatively modest, all the proposals aim to eliminate legislative irritants and to reduce the overall administrative burden that have become barriers to innovation and economic growth. What’s more, all of the proposals are cost-neutral and the associated risks are low to non-existent.

Taken together, these amendments represent meaningful change to the federal regulatory system and the need for continued commitment to its modernization.

Before I get into the details, allow me to provide some information on how this bill came about.

To begin with, the process to modernize regulations is part of the mandate of the President of the Treasury Board of Canada. In her mandate letter from the Prime Minister, Minister Fortier is asked to continue regulatory reform efforts in collaboration with her cabinet colleagues. This includes improving transparency, reducing administrative burden and harmonizing regulations that maintain high safety standards and improve the competitiveness of Canadian businesses.

The bill is meant to be a recurring legislative mechanism that allows the federal government to address overly complicated, inconsistent or outdated requirements and to keep the regulatory system relevant and up-to-date. It is designed to address legislative challenges raised by businesses and all Canadians through consultations and targeted regulatory reviews. Business stakeholders, including the Economic Strategy Tables and the Advisory Council on Economic Growth, have emphasized the importance of regularized mechanisms in order to review and update Canada’s regulatory system.

In addition, the External Advisory Committee on Regulatory Competitiveness, made up of business, academic and consumer stakeholders, has recommended that there be continued efforts to reduce the administrative burden of regulations and to ensure that they are “future proofed,” which means keeping pace with changing technologies and business realities.

By amending laws that are too inflexible, too specific or simply outdated, this bill is an important reminder of the need for ongoing regulatory review and legislation that stands the test of time.

The bill does just that, and it also helps address irritants in regulatory processes, ensuring that our regulatory system evolves with the times.

This bill is a key part of the government’s plan to improve the regulatory system. Initiatives supporting regulatory reform were announced in four successive budgets beginning in 2017. In the 2018 Fall Economic Statement, the government announced that starting in 2019, it would introduce annual legislation to ensure that the regulatory system evolves with changing technologies and reflects the current realities, challenges and opportunities faced by business.

Accordingly, the Budget Implementation Act 2019, No. 1 included a regulatory modernization component that modified 12 pieces of legislation. That bill included measures to digitize paper-based processes; enable innovation through regulatory sandboxes that allow exceptions from certain regulatory requirements to test new products; and to make rule changes in consideration of zero-emission vehicles.

The current Bill S-6 would have arrived in Parliament sooner but for the COVID-19 pandemic. It was, however, foreshadowed in Budget 2021 in which the government committed to table in Parliament the second Annual Regulatory Modernization Bill, which is Bill S-6.

Let me now turn to some of the key amendments proposed in this bill.

There is a change, for example, to the Canadian Food Inspection Agency Act that would allow the CFIA to deliver services and for businesses to interact with the agency using electronic means rather than having to rely solely on paper-based transactions. This will reduce the administrative burden for businesses and allow them greater flexibility in their interactions with government.

In addition, there are amendments to the Canada Transportation Act that would allow for new mechanisms to integrate changes more quickly to international safety standards. This would ensure that our transportation sectors are meeting the most up-to-date safety standards, keeping pace with changes in technology and innovation. The Standards Council of Canada, on whose board I served for a number of years, examined 34 Transport Canada regulations in 2021 and found that 41% of the standards referenced in those regulations are outdated.

There are also changes to the Department of Citizenship and Immigration Act to enable information-sharing to help administer any federal or provincial law for permanent and temporary residents. This would support collaboration between federal departments, provinces and territories and enable faster processing of applications to address labour market needs. Did you know that 50% of permanent residency applicants already have temporary residency applications approved and, hence, have already provided much of the information needed for their PR applications? This is not trivial, because some forms require the applicants to address more than 100 questions.

There are other amendments, for example, to the Canada Business Corporations Act, the Canada Not-for-profit Corporations Act and the Canada Cooperatives Act to simply change the term “annual return” so that it doesn’t create confusion to stakeholders.

Colleagues, if you are thinking what could be so confusing about the term “annual return” and asking yourself if it isn’t just the tax return that companies have to file every year, the answer is that it is not. If you figured that they were one and the same, you would be among the thousands of Canadian business owners who have been confused by this nomenclature.

In fact, the annual return that is referenced in the Corporations Act and related acts is not the same as the tax return that is administered by the CRA. Rather, it is an annual submission to provide updated information about the entity, shareholders, directors and officers. Not filing this information for a number of years can result in a company being dissolved, as well as expenses to revive the company.

A simple, possibly innocent, error due to confusing nomenclature can result in significant consequences, and the proposed amendment in Bill S-6 seeks to eliminate the likelihood of such errors.

Adding clarity through these amendments would reduce the risk of active corporations becoming dissolved because they did not file.

I would also mention the amendments to the Electricity and Gas Inspection Act to allow the use of different sampling methods to verify electric and gas meter measurements. Electric and gas meters are used by utility companies in residential and commercial properties to track energy usage for billing purposes. Allowing greater flexibility in the sampling and testing approach would help ensure that Measurement Canada — the agency responsible for regulation — only samples what is required to verify accurate readings, saving time and money.

There are also amendments to the Fisheries Act that would clarify that fisheries officers have the authority to use alternative measures in response to minor violations, which is an authority that was unclear in the existing legislation. This change could not only reduce the number of lengthy and costly court processes but also ensure that small violations don’t result in criminal records and the stigma and barriers that can come with it.

The use of such alternative measures has been supported by the fishing community and by Indigenous groups. In fact, all of the proposed amendments come from either the advice of multi-stakeholder groups that are involved in ongoing consultations or targeted regulatory reviews, or from the recommendations of our very own Standing Joint Committee for the Scrutiny of Regulations. I have been a member of the Scrutiny of Regulations Committee almost the entire time that I have served in the Senate, and I’m very pleased for the recognition that this bill gives to the important work of that committee.

Perhaps next time there is committee selection, there will be a rush of applicants to join the Scrutiny of Regulations Committee.

Since the amendments are both disparate and quite technical, I will not be able to address all of them in this speech nor likely even to address all of the questions you may have on very specific items in the bill, which is why I think the best place to study the specific amendments is in committee. I would encourage us to send the bill to the relevant committees as soon as possible so that they have sufficient time to do their work.

Honourable colleagues, these are just a few of the amendments included in the bill, but I think they give you a sense of the breadth and the potential impact of having it passed.

Looking ahead, the Treasury Board Secretariat is already considering proposals for the third Annual Regulatory Modernization Bill. A key theme of this next round of modernization will be how it might contribute to the response to COVID-19 and recovery efforts to that end. Businesses and all Canadian stakeholders will have the opportunity to share their views on improving the regulatory system. A consultation will take place this fall to collect ideas for potential amendments to be included in subsequent regulatory modernization bills.

Let me add that because this is meant to be an annual exercise with an Annual Regulatory Modernization Bill introduced each year, passing this Bill S-6 as a stand-alone bill will help establish a precedent for future bills and, I hope, establish the commitment that Parliament has to ongoing improvements to our regulatory system.

Colleagues, in addition to the Annual Regulatory Modernization Bill exercise, there are other ongoing initiatives to modernize our regulatory system. For example, there is a process of targeted regulatory reviews to reduce barriers to economic growth and competitiveness, and to advance novel regulatory approaches to support innovation.

Federal regulators are also implementing regulatory road maps for two rounds of reviews. Some of the areas of focus for these regulatory reviews have included agri-food and aquaculture, health and biosciences, transportation, clean technology and international standards to name just a few. Indeed, some of the changes proposed in Bill S-6 stem from the regulatory reviews that I just described.

There is also within government something called the Centre for Regulatory Innovation that promotes a whole-of-government approach to regulatory experimentation to support innovation and competitiveness, and help regulators and the regulatory system keep pace with technological advances.

Finally, Canada is actively engaging with partners in the United States and the EU, as well as with provinces and territories, to reduce unnecessary regulatory differences and eliminate duplicative requirements among jurisdictions.

Honourable senators, this bill is about modernizing Canada’s federal regulatory system. It seeks to make the system more efficient and less burdensome, while maintaining protections for consumers, health, safety and the environment. I look forward to working with all of you on this bill, and I hope we can soon send it to the committees for their detailed scrutiny of the proposed amendments.

Thank you.

Hon. Jim Quinn: Would the Honourable Senator Woo accept a question?

Senator Woo: Yes, of course.

Senator Quinn: Honourable senators, I rise this afternoon on behalf of our honourable colleague Senator Robert Black who can’t be with us this afternoon. The question is as follows:

For the past few years, there has been extensive work highlighting the importance of regulatory modernization to Canadian agriculture and, by extension, the Canadian economy. Starting with the Advisory Council on Economic Growth, the Barton Report, and followed by the Agri-Food Economic Strategy Table, this work culminated in the Agri‑food and Aquaculture Roadmap and regulatory review that involved significant consultations with agri-food stakeholders.

How does this bill, which touches on many critical pieces of legislation for Canadian farmers, relate to that road map and reflect the voices of Canadian farmers that informed that work?

Senator Woo: I thank you, and I thank Senator Black for being the originator of the question.

By my count, 22, possibly 23, of the amendments out of the 46 in the bill, apply to the agriculture and agri-food sector. Many of those amendments derive precisely from the regulatory efforts and consultations that you reference, both the agriculture and aquaculture regulatory review process, as well as the so-called Barton Report.

To give you some examples, number 17 on the Feeds Act and number 25 on the Seeds Act — feeds and seeds — will bring about changes in the legislation to allow for mutual recognition of feed and seed safety guidelines between Canada and a partner country — in what they call equivalents or mutual recognition agreements — in order for processes in seeds and fertilizers and other materials to be shared between the two countries without repeating the testing and approval processes. That is believed to be helpful to our industries and to augment and enhance trade between Canada and trading partners.

Another example would be amendment 30, which has to do with the control of breakouts of animal disease. The current legislation is a bit unclear in terms of what a control area is and whether a place that has an incidence of this disease would be considered to be subject to the regulations, even if it is outside the control area. The amendment makes clear that a so-called place that is designated would be subject to the same restrictions, even if it were not part of the so-called control area.

Hon. Denise Batters: Senator Woo, I actually had the privilege of being the joint chair of the Scrutiny of Regulations Committee in 2014 and 2015, prior to that election. I was a member of for a couple of years before that, from the time that I came to the Senate. I certainly know and understand that it is a very important committee where this type of technical work gets done.

Stemming from my work for the Government of Saskatchewan, I saw it as a real benefit to have these types of regulatory statutes, which are brought forward quite often — in Saskatchewan, generally they try to do this every year or two — where they tidy up these regulations and statutes. When I was joint chair, I suggested strongly that this be done by the federal government to ensure these types of corrections to statutes can be made in a timely way.

However, I don’t think that has happened. Since the Trudeau government has been in power, I’m not sure how many times these types of regulatory statutes have been tidied up. Could you please answer that question?

Just yesterday the Scrutiny of Regulations Committee had its first meeting of this parliamentary session, already several months into it. Has that also been a problem, that we haven’t had many Scrutiny of Regulations meetings? We used to have them every two weeks when I was joint chair.

Senator Woo: Thank you, Senator Batters, for the question. Let me start with the question about the committee’s constitution.

We did, in fact, meet yesterday for the first time in this Parliament. I’m honoured to have been elected joint chair, together with MP Blake Richards from the House of Commons. We will meet every two weeks now until we rise for the summer and we hope to get as much work done as possible.

Some of the work of the Scrutiny of Regulations Committee can translate into immediate change on the part of the government if it doesn’t require a change in legislation. You will know, since you were a former joint chair, that a number of the requests the committee has made to departments pointing out errors in their drafting of regulations has resulted in their making the changes. Sometimes it’s like pulling teeth, you will remember. That kind of progress can be made without, in fact, changing the acts.

Of course, if errors spotted by the Scrutiny of Regulations Committee require changes in legislation, then we are into this kind of process here. Indeed, Bill S-6 contains at least a dozen measures that derive directly from the direct or indirect advice of the committee. I would be happy to provide more information on what specific advice was given. Those of us who have served on this committee should take pride that our observations in the committee — with the blessing of this chamber and the House — will result in changes to legislation.

However, Bill S-6 is much more than just cleaning up of regulations and laws based on the comments of the Scrutiny of Regulations Committee. The majority of changes in Bill S-6 derive from either the regulatory review process that is held with business and consumer stakeholder groups, which Senator Quinn referred to, or they derive from targeted Regulatory Reviews that the government has launched in particular sectors.

We have three streams of material that have fed into Bill S-6. We have the work of the Scrutiny of Regulations Committee, often of a technical nature and to do with the integrity of the bill; we have the regulatory review consultation process with stakeholders and, finally, we have the targeted Regulatory Reviews that are led by departments.

Senator Batters: Senator Woo, thank you for that. However, my question remains unanswered.

Perhaps you can answer this: Is this the first regulatory statute of this type from the Trudeau government during its six and a half years in power? If not, how many have there been? How many meetings did your committee have during the last parliamentary session, given that we are already several months into this session and we just had the first meeting?

Senator Woo: We call this the second Annual Regulatory Modernization Bill. The first one was part of the 2019 Budget Implementation Act. It was embedded within that bill but clearly spelled out as the first set of regulatory modernization activities. The short answer is that this is number two.

Insofar as Scrutiny of Regulations Committee meetings during the last Parliament, I believe we had one substantive meeting. The reasons are well known to all of us. It was lower in the pecking order in terms of priority time slots for committees to meet. Being a joint committee made it more complicated. There were delays in the nomination of the joint chair on the other side and, of course, there was a short parliamentary session.

However, as I mentioned, we now have some runway. With a bit of luck, we can get five meetings in before the end of June, and we hope to get a lot done.

Hon. David Richards: Senator Woo, would you take a quick question?

Senator Woo: Yes, of course.

Senator Richards: You mentioned in this regulations act the relaxation of fishery charges. Would you have information on which specific charges you are talking about? If you don’t have the information at hand, could you send me an email about this, please?

Senator Woo: Thank you, Senator Richards. The best place to get those detailed answers is in committee. I look forward to detailed scrutiny. I think it’s not so much a relaxation of rules but, rather, the ability for fisheries officers to legally use alternative dispute settlement mechanisms for minor infractions of the Fisheries Act.

Hon. Dennis Glen Patterson: I would like to ask Senator Woo a question.

Senator Woo, thank you for that informative speech. You have urged that the bill go to committee; however, it covers a broad area and a number of existing statutes. Do you see one committee being a main committee? How would committees of the Senate deal with such a broad piece of legislation? Thank you.

Senator Woo: Thank you, Senator Patterson. The question and the decision on which committee or committees the bill goes to are now beyond my pay grade. I know the leaders are discussing this issue. I believe they are contemplating sending the bill to multiple committees. I think we can roughly guess which committees are suited for which amendments.

I do agree with you — if, in fact, this is what you were suggesting — that there should be a master committee; again, I leave that decision to the leadership.

What I will say, though, colleagues, is that if we agree that regulatory modernization is a good thing and that we should do it on a regular basis — sort of like housecleaning, right? — if we have to do spring cleaning every year, let’s think about how best to do it in the Senate and how best to organize ourselves so that we don’t have to debate which broom to use and which mop is the most efficient.

Personally, I would like to see us play a leadership role in the broader issue of regulatory reform for this country and to provide some leadership in Parliament in terms of pushing forward this agenda on a regular basis, regardless of the government in place. This bill will give us the opportunity to think about what some best practices might be.