WHY COMMON STANDARDS FOR LEGISLATION AND REGULATION ARE IN OUR BEST INTERESTS
We live in a great country. One that is pretty diverse, as any of you who have had the opportunity to travel across Canada can appreciate.
While such diversity is a real strength, in my view it can also be a weakness if the lens through which we look is trained on the differences that separate us as opposed to the similarities that bind us together.
Regardless of how we identify ourselves, there is also the matter of the Constitution which sets out what matters and issues are the jurisdiction of the federal government and what issues fall under the responsibility of provincial and territorial governments.
BURDEN FOR BUSINESS
While there are unquestionably unique jurisdictional circumstances and obligations under the Constitution that warrant intervention at the provincial or territorial level, having 13 jurisdictions enacting similar-but-not-exactly-the-same pieces of legislation, really doesn’t make a lot of sense. It also creates a significant compliance burden for businesses that operate in more than one province or territory. With the ongoing consolidation of dealerships within dealer groups who have stores in more than one province or territory, this is becoming increasingly evident.
This issue of “similar- but-not-exactly-the-same” transcends legislation and regulation, as governments in many provinces have increasingly adopted a “delegated administrative authority” (DAA) model in which the government essentially contracts out responsibility for regulation and enforcement of a particular Act or sections of it to a private party, with some government representation on its governing board.
In the automotive industry, good examples are the Ontario Motor Vehicle Industry Council (OMVIC) and the Alberta Motor Vehicle Industry Council (AMVIC). The DAAs also generally have the power to establish fees to fund their regulatory oversight. The fees are paid by those they regulate, which in the case of the entities like OMVIC and AMVIC, means automotive dealers.
GREATER HARMONIZATION
The concept of similar-but-not-exactly-the-same does not stop with DAAs either. Over the last few years some readers may be aware of the exponential growth in environmental stewardship organizations in different provinces across the country. These organizations have been established as a consequence of waste diversion or recycling legislation and regulations.
All well and good, but the end result is a myriad of complexity and cost. Within my own organization we have attempted to keep track of all of the different stewardship programs in all of the different provinces and territories in an effort to assist our members.
At last count our matrix had 49 different programs and initiatives to address what amounts to probably a half dozen or so different “designated products” common to all provinces. While some harmonization of programs has recently started to take place with stewardship programs, to this day it largely remains a compliance nightmare for companies operating in multiple jurisdictions.
I find it very ironic that in an age where all levels of government seem focused on “red tape reduction” and “improving regulatory efficiency,” actions being taken to address these goals have the effect of only making things worse for businesses operating in more than one sub-national jurisdiction.
Consider that as the federal government becomes more efficient by shedding cost and placing more responsibility on the provinces and territories, a reasonable outcome would be for each of those jurisdictions to act in a similar-but-not-exactly-the-same way to step up to new responsibilities via provincial or territorial legislation or regulation.
With many provincial and territorial balance sheets reflecting significant deficits, however, and no public appetite for any tax increases, one reasonable solution is seen as establishing a DAA. This is because a DAA then has the means of generating non-tax revenue from those it is regulating. A similar outcome occurs with environmental stewardship organizations too. If there was some degree of harmonization or even a single DAA or stewardship organization on a national basis, this might be a reasonable outcome, but right now, that is not where we are.
I am not necessarily advocating for decreased legislation or regulation but rather for smarter regulation when it is the only option to achieve a public policy objective. There is a key role for the federal government to play in providing leadership by regulating on a national basis or, if that cannot be the case, having a leadership role that can still be played in bringing the provinces and territories together on a harmonized approach to a given issue.
The risk in not taking such an approach is increased costs and decreased competitiveness for Canadian business at a time when it needs to be achieving the exact opposite.
