In the 2023 Annual Regulatory Modernization Bill consultation process, the Government of Canada is exploring whether, or under what conditions, to grant all federal regulatory organizations the authority to incorporate by reference internal government documents by allowing specific, often technical, documents to have the same force of law as regulations without the need to amend the regulation each time the document is updated. The consultation also seeks input regarding another tool, regulatory sandboxes; however, our submission is focused on IBR. The results of this consultation may lead to changes that would be enacted through the next Annual Regulatory Modernization Bill.
Our key points are:
- IBR separates law-making from democratic oversight by Parliament by sub-delegating (i.e. those already delegated authority further delegating it to subordinates) regulatory power to unelected bureaucrats.
- IBR removes fundamental oversight and transparency mechanisms because IBR documents and their amendment processes are excluded from the Canada Gazette process.
- The current proposal would expand the application of IBR, accelerating a slippery slope that weakens responsible government by removing regulatory accountability from elected representatives,
- Documents that are “of a technical nature” are not inconsequential. Denying affected people an open and transparent process when laws affecting them are being changed is unjust.
- IBR provides greater opportunity for lobby groups to exert influence on bureaucracies to push for regulatory changes that advance their private interests.
Our fundamental concern is that IBR separates law-making from democratic oversight by Parliament. The authority to use IBR transfers power to create and amend regulations from elected representatives to unelected bureaucrats who are not directly accountable to voters. Combined with a regulatory policy that gives privileged access to corporations, the proposed use of IBR for internally-generated documents enables, encourages, and may even institutionalize the influence of lobbyist working on behalf of regulated parties over public regulators who should be working for the broader public interest. This unacceptably widens the gap between those responsible to the public and those making the laws that govern the public.
The NFU therefore recommends:
- Canada’s federal regulation-bodies should be authorized to use IBR for internally created documents on a strictly limited basis for technical documents only. Whether a technical document or measure is acceptable for IBR must be reviewed and approved by public-interest experts with no financial ties to the regulated parties affected by the proposed regulation.
- A new section of the Canada Gazette should be established for IBR documents to make the documents transparently accessible.
- Proposed amendments to IBR documents must be posted in the Canada Gazette along with their rationale and expected impacts, and with meaningful opportunity for the public to provide input and feedback.
- Criteria for regulatory modernization must be revised and re-balanced to prioritize public interest values including health, environmental protection, social justice and inter-generational equity.
The rationale for this set of recommendations is detailed below.
Weakening Parliament
In 2012 when the Harper government introduced Bill S-12 to authorize static (as the document was worded on a specific date) and ambulatory (as the document may be changed from time to time) IBR for documents created by bodies outside of the federal government, there was vigorous debate in Parliament. Liberal Senator, Hon. Mac
Harb raised substantive concerns, including:
Let me quote from Parliament’s advice on this issue to the government in a 2009 briefing to the Minister of Justice. Unanimously, the Parliament of Canada and the Standing Joint Committee for the Scrutiny of Regulations said:
. . . ambulatory incorporation of material generated by the regulation-maker is frequently justified as being a more “flexible approach.”
What this really means is that it allows rules to be imposed without having to go to through the regulatory process, with its requirements for examination, registration and publication. In effect, rules that Parliament intended would be imposed by legislation will be put in place by administrative fiat.
Harb also said:
Parliament’s position on the use of incorporation by reference has been based on the rule against sub-delegation, which is often stated by the Latin maxim delegatus non potest delegare — a delegate cannot delegate. This reflects the legal principle that an entity or a person to whom a power is delegated cannot re-delegate that power to another entity or person unless explicitly authorized by law to do so. Whether we are referring to the Governor-in-Council or a minister, board, commission or some other entity that is empowered by law to make regulation, they cannot, in the absence of authorization, delegate their power to another person or entity to act in their place. This protects Parliament’s right to choose who can exercise the delegated power. This is a basic principle of our democracy and it is entrenched in our Constitution.
Furthermore, IBR documents escape review by the Standing Joint Committee for the Scrutiny of Regulations, because the Committee only reviews regulations after they complete the Canada Gazette process. The Library of Parliament’s research paper outlining the history and functions of The Standing Joint Committee for the Scrutiny of Regulations concludes by saying:
Two core constitutional principles in a parliamentary democracy are the rule of law and parliamentary supremacy. Parliament is the source of federal regulation-making authority, and so the body to which legislative authority is delegated may only exercise that authority if, when and to the extent that Parliament has authorized. By reviewing regulations and other statutory instruments for compliance with that delegated authority, the Standing Joint Committee for the Scrutiny of Regulations plays an essential role in ensuring parliamentary oversight of the laws that govern all Canadians.
Slippery Slope:
The Harper government’s Bill S-12, re-introduced as Bill S-2 in the following session of Parliament, amended the Statutory Instruments Act to permit IBR of documents that were created by a person or body other than the regulation-making authority – that is, documents that were not created within the federal bureaucracy. It passed and received Royal Assent in 2015. Meanwhile, Bill C-18, the Agriculture Growth Act, contained specific authority to allow IBR under several Acts dealing with agriculture and food also became law in 2015. Bill S-2 ensured that any limitations on IBR authority under the Statutory Instruments Act do not apply to IBR separately authorized under specific statutes. In both cases the IBR authority included static and ambulatory incorporation – documents as they exist on a specific date, or as they may be amended from time to time.
Now, Treasury Board is proposing to extend the authority to create regulation by static and ambulatory IBR to documents internally created by all federal regulation-making authorities. This is a significant transfer of regulatory power from Parliament to the federal bureaucracy, removing accountability of elected MPs, and leaving civil servants in charge of changing details of certain regulations that govern Canadians.
As more of Canada’s regulatory authority moves into IBR, the transparency and access that the Canada Gazette process has provided since Confederation further recedes.
Regulatory amendments other than IBR documents are posted in the Canada Gazette, and are immediately available to anyone who would like to see them. Dates for the public consultation period are clearly stated. The consultation page includes a detailed description of the issue(s) to be addressed by the regulatory change; the rationale for the proposed regulation; a regulatory analysis that includes expected impacts, costs and benefits of the change; implementation, compliance and enforcement plans; and the proposed text of the regulatory amendment. The address for the public to submit comments is clearly stated.
Regulations amended through the Canada Gazette process are also reviewed by the Treasury Board and approved by the Governor in Council (Cabinet), to ensure they meet the standards set by the Cabinet Directive on Regulation. This review process would not apply to IBR documents. The department or agency responsible for administering the regulation would have full authority to make changes to incorporated documents, and the IBR changes would come into force upon publication on the regulatory body’s website – without public notification requirements.
The current consultation frames IBR as something that would apply only to technical documents, and would avoid the trouble of a formal regulatory amendment process if minor details needed to be revised. However, the trend to further weaken Parliamentary oversight and provide faster approval of changes suggests that arguments to move more substantive regulatory elements into IBR will quickly be given a hearing.
The current Seed Regulatory Modernization process is a case in point. The CFIA is entertaining proposals supported by Seeds Canada, which represents multinational seed corporations and their allies, to move fundamental elements of Canada’s seed regulatory system into IBR, such as the list of which crop kinds require variety registration in order to be sold in Canada, what rules apply to seed establishments that clean and condition certified seed, and what quality and purity standards apply to certified seed grades. No doubt other regulated sectors have lobbyists working on similar proposals to weaken government oversight by moving substantive regulations into IBR documents.
Lobbyists and bureaucrats behind closed doors
The Canadian Food Inspection Agency (CFIA) was given IBR power when the Agriculture Growth Act was passed in 2015. This was an omnibus bill that amended five laws administered by the CFIA. The CFIA has an IBR policy which illustrates how it implements IBR. The CFIA’s process for amending ambulatory CFIA-generated documents incorporated by reference includes the following steps:
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- Review and approvals
CFIA will conduct relevant assessments and consultations (that is, internally and with interested parties) when developing the proposal. In addition, CFIA will determine if a proposed modification would create possible administrative burden to both CFIA and regulated parties. Once a proposal is finalized, it will be reviewed and approved by the appropriate management level within CFIA, as established by CFIA guidelines.
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- Domestic and international notification
Once the proposal is approved internally, CFIA will normally notify domestic stakeholders and international trading partners of the proposal and provide them with the opportunity to comment. When the proposed regulatory modification may have an effect on international trade, notification to Canada’s trading partners will also be provided. In such cases, CFIA will submit a notification to the World Trade Organization (WTO), in accordance with Canada’s international obligations. The duration of the domestic and/or international comment period(s), if applicable, will be specified in the notice. The time will vary depending on the nature of the modification and international and domestic regulatory requirements. Notification may be made public on CFIA’s website or through alternative and complementary methods of notification (such as, distribution lists, direct discussions with associations and organizations, etc.).
The CFIA decides who the relevant stakeholders are and informs them of proposed changes directly. There is no mandatory public notification in this process. The policy is focused on “regulated parties” (companies that must comply with regulations), without mention of those who would be affected by the implementation of the regulatory change (such as farmers and the general public). The criteria for assessing impact of proposed changes are “administrative burden” on the CFIA and on regulated parties – that is, will it be more expensive for companies to comply with the proposed change? Will it cost the CFIA more to enforce the change? There is no mention of whether or how the proposed change will support policy goals. Criteria regarding the impact of the proposed change on food, feed and environmental safety or human health are conspicuously absent – as is impacts on the livelihoods of the farmers, farm workers, food workers and others whose lives are affected by the regulatory change. There is no requirement to notify people not considered “stakeholders” or to even publish the proposed changes (the word ‘may’ is used, meaning the CFIA policy allows it to do something, but it doesn’t require it to). The CFIA also has sole discretion as to whether to proceed with a change based on the input it receives.
The CFIA’s IBR policy shows that regulatory changes could be decided entirely through a closed loop of CFIA bureaucracy discussing proposals with regulated parties.
When the CFIA decides to go ahead with a proposed change to an IBR document, it takes effect as soon as the revised document is posted on the CFIA’s website. There is no requirement for providing notice or publicly announcing the change.
Technical documents not inconsequential
While many of the IBR documents adopted so far are very technical and could be considered primarily administrative matters, some have much wider implications than simply “housekeeping matters”. A document considered merely technical by some may in fact be a substantive matter with broader implications. It should not be bureaucrats and regulated parties who make that call.
The Canada Gazette process for proposing and amending regulations provides fairly detailed information, written in a way that is accessible, allowing Canadians to reasonably understand the regulatory proposal. The public Gazette process allows lay people, civil society organizations and concerned citizens access to the regulatory amendment process, by providing information and notice that a change is proposed. Through this process, what might have been considered merely “technical” may be revealed as politically charged, or having impacts that the regulatory body responsible had not considered or had failed to incorporate into their analysis. The public, transparent, Canada Gazette process is an essential part of our democracy. It ensures there is opportunity for Canadians to participate in government directly, and ensures that elected officials are tied to regulatory decisions by clear lines of accountability.
A tool for lobbyists
Regulatory capture occurs when the regulatory body is dominated by the interests of the regulated parties (i.e. industry) and acts on their behalf instead of upholding the public interest. Not only does regulatory capture clearly exist in the federal bureaucracy, the Canadian government has been actively promoting, funding and encouraging processes that give lobbyists privileged access to regulators so that they may influence the development of regulations at the earliest stages – including expanded opportunities for suggesting and initiating regulatory proposals.
In 2016, former Finance Minister Bill Morneau established the Advisory Council on Economic Growth, with Dominic Barton, then global managing partner of McKinsey & Company, as chair, and appointed executives of major corporations, pension funds and academics affiliated with right-wing think tanks as members. This council produced several reports recommending industry-led changes to Canada’s regulatory processes. Based on these reports, the federal government set up six sector-focused Economic Strategy Tables, as “a new model for collaboration between industry and government” each chaired by an industry CEO, with a senior (Deputy Minister level) representative from the federal government, to make policy recommendations.
Based on their recommendations, the federal government set up the External Advisory Committee on Regulatory Competitiveness to “to advise Treasury Board on how to improve regulatory competitiveness in Canada to support the modernization of Canada’s regulatory system into one that enables investment and catalyzes innovation”. Also based on Economic Strategy Table recommendations “aimed at improving the regulatory environment for business” the government created the Centre for Regulatory Innovation . It funds federal regulators to collaborate with businesses to develop approaches to regulation that “support competitiveness.” While couched in terms of “excellence” and giving lip service to inclusion, health and environmental protection, the criteria for regulatory improvement is fundamentally about reducing or eliminating compliance costs for corporations.
On the corporate side, the regulatory landscape includes large industry organizations such as the Center for Food Integrity, and its offshoot, the Canadian Centre for Food Integrity, which are devoted to pre-empting and rolling back mandatory government regulation of the agriculture and food sector. Their strategy is to use a well-funded, multi-year public relations and lobbying campaigns to build “public trust” in the corporate sector in order to obtain “social license” to operate without constraint. The Center for Food Integrity states “Earning trust is key to the food system maintaining its social license, the privilege of operating with minimal formalized restrictions, and its freedom to operate.” In 2016, a “Public Trust” pillar was added to the Canada’s federal-provincial-territorial Agriculture Policy Framework, perhaps as a result of successful industry lobbying.
Through these initiatives, the federal government has collaborated with the corporate sector to embed regulated parties (the companies that must comply with regulations) into the process of developing regulations, and has provided them with mechanisms and funding to propose industry-friendly regulations and participate in development of regulations prior to any public notification, pre-empting meaningful public participation. The capacity of public regulators is simultaneously being diminished. Budgetary choices to defund them results in program cuts, deteriorating facilities, privatized functions, work outsourced to contractors, unsustainable workloads and delays in decision-making. Minimizing regulations that actually need to be enforced thus serves cost-cutting objectives at the expense of the public interest.
Empowering all federal regulation-making bodies to use IBR would provide allow captured bureaucracies to create and amend regulatory documents without fear of scrutiny by the public, the Standing Joint Committee for the Scrutiny of Regulations, or even by the responsible Minister or Cabinet.
Therefore, the National Farmers Union recommends the following:
Canada’s federal regulation-bodies should be authorized to use IBR for internally created documents on a strictly limited basis for technical documents only. Whether a technical document or measure is acceptable for IBR must be reviewed and approved by public-interest experts with no financial ties to the regulated parties affected by the proposed regulation.
- Canada’s federal regulation-bodies should be authorized to use IBR for internally created documents on a strictly limited basis for technical documents only. Whether a technical document or measure is acceptable for IBR must be reviewed and approved by public-interest experts with no financial ties to the regulated parties affected by the proposed regulation.
- A new section of the Canada Gazette should be established for IBR documents to make the documents transparently accessible.
- Proposed amendments to IBR documents must be posted in the Canada Gazette along with their rationale and expected impacts, and with meaningful opportunity for the public to provide input and feedback.
- Criteria for regulatory modernization must be revised and re-balanced to prioritize public interest values including health, environmental protection, social justice and intergenerational equity.
All of this respectfully submitted by
The National Farmers Union
June, 2023
The National Farmers Union (NFU) is Canada’s largest voluntary direct membership farm organization representing family farmers and farm workers from across the country in all sectors of agriculture. We work to promote a food system that is built on a foundation of financially viable family farms that produce high quality, healthy, safe food; encourage environmentally-sensitive practices that will protect our precious soil, water, biodiversity and other natural resources; and promote social and economic justice for food producers and all citizens.
Partial list of Federal Regulatory Organizations
Agriculture and Agri-Food Canada
Canada Border Services Agency
Canada Energy Regulator
Canada Revenue Agency
Canadian Food Inspection Agency
Canadian Grain Commission
Canadian Human Rights Commission
Canadian Nuclear Safety Commission
Canadian Radio-television and Telecommunications Commission
Canadian Transportation Agency
Commissioner of Canada Elections
Crown-Indigenous Relations and Northern Affairs Canada (formerly INAC)
Department of Finance Canada
Department of Justice
Employment and Social Development Canada/Labour Program
Environment and Climate Change Canada
Financial Consumer Agency of Canada
Financial Transactions and Reports Analysis Centre of Canada
Fisheries and Oceans Canada
Global Affairs Canada
Health Canada
Immigration, Refugees and Citizenship Canada
Impact Assessment Agency of Canada
Indigenous Services Canada
Innovation, Science and Economic Development Canada
Natural Resources Canada
Parks Canada Agency
Public Health Agency of Canada
Public Services and Procurement Canada
Royal Canadian Mounted Police
Transport Canada
Treasury Board of Canada Secretariat
Veteran Affairs Canada
