I call this meeting to order. It is 4:30 by my watch.
We will continue our 36th meeting with the second item on the agenda.
It is our pleasure to receive the President of the Treasury Board who is here to answer questions on Bill . He is the sponsor of the bill. He is thus the first witness to appear before our committee. He will speak for about 10 minutes. Then committee members can ask him questions.
He is accompanied by Mr. Vandergrift, Assistant Secretary, Regulatory Affairs.
Without further ado, I give the floor to Mr. Clement, President of the Treasury Board.
It is a great pleasure to be here with you this afternoon to talk about how we can reduce red tape for SMEs.
As you already mentioned, Mr. Michael Vandergrift, who's the assistant secretary of regulatory affairs at the Treasury Board Secretariat, is with me. We're pleased to comment on Bill , which enshrines the one-for-one rule into law and as a result will help to permanently control the growth of federal regulatory red tape.
The one-for-one rule, I should mention to committee, has already been in place as a rule for more than two years.
The one-for-one rule has been in place for more than two years.
It is a cornerstone of the government's Red Tape Reduction Action Plan, which we launched in October 2012 to eliminate unnecessary regulations, while maintaining high standards for safety and protection.
The purpose of the rule is to make regulation as pain free and efficient as possible for Canadian businesses, particularly small and medium-sized businesses, and to free them up for what they do best, that to is to say, to grow, innovate, and create jobs.
Specifically the one-for-one rule requires regulators to monetize—and I will get into that a bit later—and offset any increases in administrative burden that result from regulatory changes with equal reductions from existing regulations. One rule comes on and one or more rules must come off. In addition, when a brand new regulatory title is introduced that adds administrative burden, an existing regulation must also be repealed.
This approach has already proven to be effective.
During the first year of implementation, it provided successful system-wide control on regulatory red tape that impacted businesses. As of June of this year, the rule had resulted in a net annual reduction of more than $22 million insofar as it is calculated for administrative burden on businesses, an estimated annual savings for businesses of 290,000 hours—that's 33 years dealing with regulatory red tape—and a net of 19 federal regulations taken off the books.
As I mentioned earlier, the government is committed to help permanently control federal regulatory red tape.
That's why we decided to propose to Parliament that we enshrine the one-for-one rule into law, and that's why we introduced the red tape reduction act. By giving the one-for-one rule the added muscle of legislation, Canada will have one of the most aggressive red tape regulations in the world.
The one-for-one rule and other red tape reduction action plan reforms are, I can report to you, bringing a new level of discipline to how government regulates and creates a more predictable environment for businesses. And believe me, that is their request and demand of government.
And we are doing it while maintaining high standards for the safety and protection of Canadians.
Canadians count on their government and on their regulatory system to uphold the public trust.
I can assure you that the government will continue to protect the health and safety of our citizens, but we will do that while freeing businesses from unnecessary costly and time-consuming red tape. Our approach is designed to increase Canadian competitiveness and to free businesses to innovate, invest, grow, and create jobs without being impeded by unnecessary government regulations. With this bill and by following through on our other red tape commitments, we are helping to cement Canada's reputation as one of the best places in the world in which to do business and invest.
I just want to describe very briefly some of our other commitments. They include introducing the small business lens, posting forward regulatory plans on the web, increasing service standards for high-volume regulatory authorizations, and keeping track of our progress in reducing red tape through the annual scorecard report.
It's precisely because we have taken such actions that Bloomberg recently ranked Canada as the second-best country in the world in which to do business. We believe that it is the private sector and the ingenuity and creativity of hard-working Canadians that should and does create economic growth, jobs, and long-term prosperity.
Indeed, our role as the government is to put in place the right balance of policies to support them.
We are doing that not just through our red tape reduction reforms but also through other measures that secure Canada's long-term economic prosperity, including a competitive tax regime, the lowest debt-to-GDP ratio in the G-7, and a stable banking environment.
With that, I can say thank you.
They're all Conservatives. That is true, but it's not the answer I was looking for.
The answer I was looking for, Minister, is that all of those ministers are willingly appearing before their appropriate standing committees to defend their supplementary estimates (B). Many of them with amounts of money in the supplementary estimates (B) lower than the Treasury Board are coming to Parliament to ask permission to spend $151 million in vote 15b.
My question, Minister, is as pleased as we are are to have you here with us today, why can those ministers find time to show respect for the parliamentary committees that are responsible for the oversight of their departments and you never seem to be able to? It's like pulling teeth getting you to our committee to speak to one of the most important constitutionally protected rights that parliamentarians have, which is the estimates.
Thank you for being here, Mr. Clement.
We have several questions to ask you about bill . I think you are quite proud of your bill. However, there are several surprising things about it.
Firstly, we find that the premise is a bit flawed, as this bill is supposed to reduce red tape. In fact, it sets out the one-for-one rule, which means that when a new regulation is added, another regulation is removed. That does not reduce paperwork, it just prevents it from increasing.
Next, why did you choose such a populist title for the bill? Is it because businesses want to see red tape reduced? We know that for decades, they have been calling for a real reduction of paperwork. They have a lot of difficulty with the various levels of government and the various departments when it comes to reducing paperwork. This bill does not reduce paperwork.
Why did you choose a populist title given that the bill does not actually reduce red tape?
Thank you for your question.
In the first place, the one-for-one rule represents part of a major action plan to fight red tape. There are many strategies for eliminating red tape for SMEs, of course.
The one-for-one rule is one strategy. However, there are other strategies. I have already said the following:
Other strategies include looking at new regulations through a small business lens, which requires the bureaucracy and Treasury Board by extension to review a new regulation to see what impact it will have on small business. I think that's a very critical culture change.
I would also suggest to you that having a scorecard where independent assessors assess how we are reducing red tape for small businesses is also something that changes the culture.
The results are in, as I mentioned already. We looked at 290,000 hours of estimated annual savings for small businesses and more than $22 million in reductions in administrative burden.
Right. I think this is an important point. It really had not changed very much from the time I was a start-up entrepreneur as well.
Maybe I can put them in two categories. Number one is the duplication that goes along with red tape. This is usually expressed in the way that the sole proprietor or small business entrepreneur gets a whole host of forms from some level of government, spends an afternoon or an evening filling out the forms, and then the very next day another branch of the same government or another level of government asks for basically the same information. This is very frustrating to small business entrepreneurs.
The other thing that was expressed time and again was getting blindsided, to put it in that vernacular. When government comes to them with new regulations, hasn't thought through the small business aspect of those regulations, and there is a quick turnaround where they have to comply with the administrative burden, then that, to them, is not only costly economically but it obviously takes their attention away from the thing they want to do, which is to concentrate on their business and to meet the demands of government.
It makes business less predictable if government comes in and does these things without a lot of notice. That is why one of the things we've done is a forward-looking agenda on future regulatory approaches. It's so important, because it gives business the time to react and also to comment.
I have a couple of examples I can share. Employment and Social Development Canada, for instance, did amend the Canada disability savings regulations, removing the 180-day requirement for the registered disability savings plan grant and bond applications. Having that 180-day requirement in place meant that certainly some beneficiaries of those grants were delayed. Also, it removed the requirement to resubmit applications.
The annual savings for businesses just based on those two changes in that particular department were over $377,000.
Health Canada reduced the red tape burden by amending regulations to allow regulated people, pharmacy technicians, to oversee the transfer of prescriptions from one pharmacy to another. Before, it had to be done by the pharmacist himself or herself. The pharmacist is a small business person, and she or he should be attending to clients and patients, not dealing with this regulatory burden.
With that change to the regulations, not only are they spending time with patients and customers and running their businesses, but the burden on pharmacists is reduced by $15 million a year.
Those are two good, tangible examples of how it has a positive impact on things.
It uses a standard cost model, which is an internationally accepted and recognized model for calculating administrative burden. Essentially it looks at the time required to complete the forms, who's doing it, the salary cost of the individual doing it, and the number of times they have to do it. Then they get basically a firm picture at a firm level. Then you multiply it by the number of firms in the economy that have to comply by it and, by that basis, you come up with a total amount of administrative burden.
We provide tools for departments to assist them in making those calculations. Departments, as part of our guide, are also to work with and consult with the regulated parties to make sure that those numbers make sense. The summaries of these calculations are also made public as part of the regulatory impact assessment statement that accompanies every regulation.
Sure. Let me talk a little bit about the forward regulatory plans because I think that's really important for small business as well.
I talked about getting blindsided by government, and this is a common complaint that we had heard. By requiring regulatory departments and agencies to post available publicly their plans for the future on regulation does two things, in my estimation. Number one, it provides the small business the time required to get ready for that regulation, but it also creates a dialogue between the regulator and the regulated on the proposed regulation. If you know that something is coming up in two years, you can actually start the dialogue and say, “Look, I'm sure you didn't plan this, but this is going to have this kind of impact on a small business. Let's work to make sure that you can achieve the public policy goal without creating a hit for small business.” I think that's a really important concept that we have added.
The small business lens is again about requiring the regulators to assess the impact on small business, not just on Canadian society or how this means that something will be better, but on the small business as well. I think it is critically important in terms of a change of attitude.
I will first say: QED—what needed to be demonstrated. My question is for Mr. Albas.
Mr. Albas, you have demonstrated that with the “one-for-one” rule, regulations were not decreased, but processing times and costs were reduced. This allowed us to generate savings which, we hope, will be invested in social housing, old age security or poverty reduction in the country.
You spoke about 19 regulations. We would like a copy of the list of these 19 regulations. I will not ask for them now, but you could perhaps submit them to the committee.
In the preamble, the importance of transparency is mentioned. Other than the annual report, what other measures might be taken? Will the five-year evaluation be made public? What transparency measures will be taken to allow us to better understand the process for eliminating regulations on a day-to-day basis? How will data be gathered for the evaluation?
I appreciate your coming forward on this bill, Mr. Clement.
Certainly, I appreciate the NDP's support in this process here in Ottawa. I'll give you a little background in my years in opposition as a Progressive Conservative in Manitoba. Twice this type of a bill was brought forward in the legislature by my colleagues. The critics in these areas were mainly industry and small business. Twice it was defeated by the government in Manitoba at that time, so I'm really pleased to see the cooperation to move this forward.
You've indicated that we've dealt with 19 out of 2,500 regulations and saved $22 million. I don't want to extrapolate that for my colleague who was asking about how much can be saved, but that would be quite an amount of money if it was extrapolated.
This is just one of the areas for which we've brought forward changes regarding the reduction of red tape, the one-for-one rule. Could you outline a few of the other mechanisms we're using to reduce red tape as well?
Obviously, culture change is at least initially a work in progress. These things don't happen overnight, but I believe that the fact.... Everybody has to come to Treasury Board at some time or another. Having us as the filter, where we have the weekly reports that Michael drafts on where we stand with one-for-one, and where we have the Treasury Board submissions having a small business lens component when they are dealing with regulatory change, means that it is set in the mind of the drafter of the regulation as well as the considerer of the regulation, that is to say, members of the Treasury Board, such that this is top of mind.
In all honesty, these things don't happen overnight, Mr. Maguire, but I think we've made a good step. Certainly it is becoming part of the standard routine in government that these are issues that the Treasury Board and, by extension, initially our caucus—and should this bill be passed, then all parliamentarians—have an interest in, in seeing the success of this kind of operation.
I'll come back to some of the discretionary or arbitrary powers that are going to be given to the President of the Treasury Board, to you yourself.
Clause 6, for example, says “may establish policies or issue directives respecting the manner in which section 5 is to be applied.”
Pursuant to clause 7, the Governor in Council may also make regulations respecting the regulations that the Treasury Board “may exempt from the application of that section and the categories for which, and the circumstances in which, such an exemption may be granted.”
Have there been exceptions, and if there have been exceptions, of what type?