PART 5
DEVELOPING REGULATIONS
The Basic Steps and the Plain Language Approach

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INTRODUCTION

This Guide is intended for anyone involved in preparing regulations. It should help everyone who participates in the process, including the technical and policy officers in the sponsoring department and the legal advisers from the Department of Justice in the departmental legal services units (DLSUs).

This Guide performs two functions. First, it gives an overview of the process of drafting regulations. Although much has been written on the subject, there is no "road map" to point out the choices confronted by the government regulator or to identify the documents to refer to along the way. This Guide introduces you to the basic steps to follow when you prepare a regulation, and it refers you to reference documents for further details on particular points. The reference documents are primarily federal government publications, as well as certain documents on plain language.

The second basic function of the Guide is to introduce plain language elements that can be used when drafting regulations. These elements affect both the process by which regulations are prepared and the words and format used. Plain language is much more than the words and grammar used to communicate an idea. It is a process that starts before you put pen to paper. It starts with forming a team, getting a clear understanding of your objective, recognizing your "audience" and their needs and abilities.

Many people are interested in making regulations easier to read and understand by using a plain language approach. We are still in the early stages of applying plain language principles to regulations, but changes are being made.

There are many drafting conventions that apply to regulations, but it is beyond the scope of this Guide to cover all of them. The drafting part of this Guide is limited to highlighting the plain language processes and techniques that may currently be used in developing federal regulations. Other plain language techniques are being considered and, as these are approved, they will be communicated to regulators. These new processes and techniques will be added to the comprehensive Federal Regulations Manual prepared by the Regulations Section, Department of Justice, which sets out virtually all the drafting rules for federal regulations. This Guide should be used in conjunction with that Manual.

The steps outlined in this Guide combine traditional approaches to drafting regulations with more innovative ones based on plain language principles. Certain stages in the creation of a regulation, for example, the formal making, registration and publication of a regulation, will be familiar to anyone who has been involved in the process. Other elements, such as the emphasis on teamwork, consultation and usability testing, represent a less traditional approach to drafting that makes use of plain language principles. In the course of developing regulations, time and resource pressures may limit how closely you are able to follow the plain language approach outlined in this Guide; for example, urgent circumstances could justify not conducting usability testing.

1. PRELIMINARY STEPS

1.1 Identify the Issue and the Objectives

Good drafting depends on knowing what you want to say and saying it well. A critical element of successful drafting is thorough policy formulation. There are, of course, other important elements: good organization of the text, appropriate choice of words, clarity of style, presentation and testing for usability. However, if the regulation is not based on a clearly formulated policy, the other elements cannot make up for this omission, and the result will be an ineffective regulation. A French poet, philosopher and linguist once said:

Whatever is well conceived is clearly said, And the words to say it flow with ease.[1]

These words, written in 1674, are still valid today. The purpose of the written word is to convey a message, no less in legislative drafting than in other writing. Regulations convey rules. In order for those rules to be expressed clearly and accurately, they must be clear in the regulator's mind. The issue and objectives must be identified.

This section of the Guide provides you with a framework and checklist for finding the most practical approach to identify the issue and determine the remedial objectives.

(A) Principles

The first step in establishing clear rules is to identify the objective clearly. You may not be motivated by a negative or difficult situation. You may instead be aware of an issue or new initiative that you want to address. In either case, you must recognize and analyze the realities of the situation that your department wants to address. In doing so, you will have to identify powerful external factors, economic, cultural, social or psychological, that usually influence people's behaviour in the situation. It is not sufficient to conclude that there is a problem or issue that needs to be addressed; you must also know:

• why the situation needs to be addressed;
• how the circumstances combine to generate the issue;
• how severe the need is to address the issue;
• how often the issue arises; and
• what the costs of not dealing with it are.

You should assemble a team of people to flesh out the issue. By forming a working team at the beginning of the project, you can ensure that the team leader is informed and guided when identifying the issue, weighing the risks associated with the various options, and deciding which approach to take. You will need people with technical and legal expertise in the area concerned. Once the issue is defined, it must be looked at in its legal and governmental context. Call on your DLSU and the Regulations Section of the Department of Justice for assistance. Analysis of the legal and governmental context will tell you:

• whether the matter falls within federal and departmental jurisdictions. This step is essential because if the matter is outside those bounds, you cannot address it through regulations, nor are you responsible for the solution.

• Other government sectors or public interest groups may be concerned and should be consulted. Consultation is a key means of taking the views of the various stakeholders into consideration. The objective of consultation is to ensure harmonization and avoid duplication with other action taken to address the issue. You should refer to the Privy Council Office publication Consultation Guidelines for Managers in the Federal Public Service for more information on this subject.

(B) Checklist

• What is the issue that you want to address?
• Is government intervention warranted?
• What is your objective and the purpose of intervention?
• What is creating or contributing to the issue?
• Who are the key players?
• To what extent are the various players involved in the situation?
• What external factors are influencing their behaviour?
  • Do people understand and acknowledge that there is an issue?
  • Do they understand and acknowledge their contribution?
  • Do they understand and accept the government's objectives?
  • Do they understand and accept the way you want them to behave?
  • Are they capable of behaving that way?
  • What economic, cultural, social or psychological factors are involved?
  • Can the government or other bodies adequately monitor the solution?
• What changes do you want to see?
• How much change do you really need?
• Which instruments will best bring about the desired result?

1.2 Assess Ways of Achieving your Objectives

Once you have identified the issue, you should explore possible ways of addressing it. No matter what solution you consider, you must ensure that the relevant legislation is broad enough to address the problem. To ensure that any potential solution is legally viable, you should consult with your DLSU. You should also consult with the people who are likely to be directly or indirectly affected by the possible solutions.

(A) Principles

One way of achieving your objectives is, of course, by making regulations. This method has its drawbacks, however, chief among them being a significant investment of time and money. Before you decide to address the issue by writing regulations, you need to ask yourself if there are alternatives to regulation that could help you address the issue.

Alternatives may include such government intervention as taxing, owning businesses or promoting voluntary action.

The questions listed in the checklist in (B) below will help you to assess the best way of reaching your objective. The checklist is an analytical framework to help you discover whether there are other solutions that would work just as well as traditional regulation to achieve the results you seek. The following are examples of alternatives, some of which do not involve regulations at all:

• taxation (raising or lowering the cost of a particular behaviour, such as the tax on cigarettes)
• expenditure (such as subsidizing purchase of pollution-abatement equipment)
• loans and loan guarantees (such as retro-fitting workplaces to meet new safety standards)
• user charges (such as charges for disposal of toxic waste)
• public ownership
• persuasion (such as promoting voluntary action)
• modification of private law rights (such as creating new legal rights of action)
• insurance schemes (such as adjusting the premium to encourage or discourage certain behaviour)

Another option would be to consider alternative forms of regulation, such as:

• imposing direct product controls (such as putting price ceilings on public utility services)
• imposing supplier entry and exit controls (such as licensing to control the number of suppliers in the market)
• imposing production process controls
• imposing information controls
• establishing marketable rights

You may decide that the best strategy is to use incentives to strengthen the factors that bring about the desired result, or to use disincentives to weaken or eliminate the factors that bring about undesirable results.

Your decision on how to handle an issue must be based on a systematic comparison of possible alternatives. If you decide to regulate, you must demonstrate that the benefits of a regulation outweigh its cost.

The costs related to a proposal can be many and varied. Costs include any negative impact on business (for example, the paper burden and the ability to compete and be innovative), on consumers (for example, higher prices and less product choice), on governments (for example, compliance, enforcement and administrative costs), on the environment, and on health and safety. If the regulation is expected to have a wide effect with significant economic implications, one useful diagnostic tool is the Business Impact Test. For example, a Business Impact Test that was used to assess cost recovery proposals revealed that Canadian businesses that are starting up often have particular difficulties finding the funds to pay for approvals. This finding was helpful in choosing how to implement a cost-recovery program in those circumstances.

The next section of the Guide gives you a framework and checklist for finding the most practical approach to address the issue.

(B) Checklist

• What instruments (directives, regulations, policy documents) and approach (incentives, disincentives) will bring about the desired result?
• How would each alternative work in practice?
• Do you have the resources to do it? Implementing an alternative without the resources to execute it could attract liability.
• What are the comparative advantages of each alternative?
• How might each alternative be expected to alter the key issues that you have identified?

Different types of approaches, whether regulatory or non-regulatory, give different levels of assurance that the risk will be reduced. To judge which regulatory and non-regulatory alternatives are options, you will need to assess each of them according to the following criteria:

• Is it legal? The Constitution Act allocates legislative (and governing) authority, establishing the division of powers between the federal and provincial governments. The Canadian Charter of Rights and Freedoms sets limits on how governments can exercise their authority. Contact your DLSU for help in this area.

• Would it be effective? How would this alternative strengthen or weaken the factors that influence the behaviour contributing to the issue? How difficult and costly would it be to detect non-conforming behaviour?

• Would it be efficient? An efficient solution is one where the benefits equal or exceed the costs.

Your analysis will have two parts: quantifiable and non-quantifiable impacts.

• Would it be fair? Who would win and who would lose? By how much? How would this alternative change the relative standings of the various stakeholders affected?

• Is it too intrusive? How many people would be affected by this method of intervention? How detailed would the standards of behaviour be? Is this macro or micro management? What form would the behavioural specifications take? If, for example, a standard is required, can you get by with a performance specification or will you have to address technical design attributes? What kind of behaviour is being addressed? Is it something that is generally accepted as being the government's business, or is it something that is better left to other forces to resolve?

• How visible would it be? Government is there to serve the people; people need to know if, when, and how they are being served. If this alternative is used, therefore, will it be evident that government is taking action to deal with the situation? Is this alternative more, or less, visible than others? Can its visibility be increased through government action such as public announcements or other communications?

• How fast can you have it? You should be prepared to estimate how quickly each alternative could be implemented and how long it would take to generate results. For instance, regulation might be more effective, but it might take two to three years to implement.

A voluntary approach might result in somewhat lower levels of compliance but might be achievable in 6 to 12 months.

• Is it responsive? The alternative has to respond to the issue and be seen as responsive. If it doesn't address the contributing behaviour head-on, people may think that the government isn't taking the issue seriously. If it isn't tangible, if it doesn't have form, structure, and specifications that define the desired result, it may be viewed as a smoke screen.

• What type or what combination of alternatives would work best? Factors that influence the situation you want to modify are likely to be complex and interrelated. The best solution will probably be a combination of techniques that work on different aspects of the situation. Most regulatory systems rely on an assortment of techniques to achieve the desired result; for example, the techniques of training, public communications and financial assistance can be used to promote compliance. Various forms of requirements are often mixed together in statutes and regulations. For example, licensing systems may control who can provide a product, but they often also incorporate standards and pricing controls.

REFERENCE DOCUMENTS

For more information on alternative approaches to regulation, see the following Treasury Board Secretariat publications:

• Assessing Regulatory Alternatives (May 1994). Benefit-Cost Analysis Guide for Regulatory Programs, Chapter 2, Screening the Alternatives (1995).
• Competitiveness and the Design of Regulations (Dec. 1992).
• Intergovernmental Cooperation, Summary (Nov. 1994).
• Enlightened Practices in Regulatory Programs, Vols. 1 & 2 (May 1993).
• The Business Impact Test.

See also:

Tort Liability of Public Authorities: Review of Jurisprudence, 2nd Ed., Administrative Law Section, Department of Justice (Feb. 1995).

1.3 Preparing to Write a Regulation

You have assessed the available alternatives and you have been advised that you have legislative authority to proceed with a regulatory solution. At this point, you will either amend an existing regulation or write a new one. The considerations and steps involved in either process are set out below.

(A) Form a Team

Once the decision is made to write a new regulation or to amend an existing regulation, call together a team of people to serve as the key resource contacts. Ideally, the team should be made up of representatives of all of the groups who are to be involved in the regulation's development: a project leader, a technical adviser, a legal adviser from your DLSU, two drafters from the Regulations Section, Department of Justice (one for the French version and one for the English), and a representative of any other group that can contribute to the drafting effort. Regulations are prepared in both official languages; the one version is not simply a translation of the other. You must have people on the team who can provide the necessary expertise in each official language.

To promote interaction and emphasize the complementary roles of the various team members, define each member's roles and responsibilities at the outset and be sure they are understood. It may not be necessary for every team member to attend every meeting, but it is very important that the team members know who to contact if certain issues arise.

You will find that the drafters from Regulations Section will be better able to respond to the needs of the client and to the situation in which the regulation will operate through their contact with the rest of the team. This contact should reduce, if not prevent, the delays and frustrations that result from discovering problems at a late stage in the process.

Identifying all the players from the start makes the process more efficient and saves time and money.

(B) Determine What can be Done under the Authorizing Statute

It is essential to determine the legal framework set by the authorizing statute, because it gives the team an understanding of their legal constraints. These constraints rest on two legal bases:

• that the regulation-making authority has no regulation-making powers beyond those delegated to it by Parliament in the authorizing statute, and

• that in the regulations themselves it must confine itself to acting within the scope, subject-matter and legal limits that Parliament has set it in the authorizing statute.

To define the scope of the legal framework, you need to answer these questions:

• Who can exercise the regulatory power?
• What is the extent of the regulatory power, given the wording of the authorizing statute?
• How far can the holder of the regulatory power go in subdelegating matters?

The Regulations Section drafter is a specialist in the area of delegated legislation. The DLSU legal adviser is a specialist in the department's legal interests. Together, they can advise other members of the team on the extent of the legal authority the team has to work with.

REFERENCE DOCUMENTS

For more information on the legal framework for regulations, see the following Justice publication:

Federal Regulations, Department of Justice Regulatory Awareness Program, Privy Council Office Section (1992).

(C) Develop a Realistic Regulatory Strategy and a Work Plan

Team members should develop a strategy and create a work plan for the regulation. The work plan should realistically take into account all the steps in preparing, implementing and enforcing the regulation.

Once your team has a work plan, you can estimate the resources necessary to accomplish the task and determine whether enough funding is available.

REFERENCE DOCUMENTS

These reference documents provide practical advice for improving compliance with regulatory objectives. They also identify alternatives to the traditional "command and control" model of regulation, such as the use of incentives and self-regulation techniques:

• Designing Regulatory Laws that Work, Administrative Law Section, Department of Justice (1995).
• A Strategic Approach to Developing Compliance Policies, Treasury Board Secretariat, Regulatory Affairs (1992).

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Footnote

^[1]  Nicolas Boileau-Despréaux (1636-1711), The Art of Poetry [1674], canto I, l. 153