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

2. PREPARE THE REGULATORY APPROACH

2.1 Consult with Users and Public Sector Administrators

Consultation is the pathway to fair and "transparent" regulatory development. If time and resources permit, it is helpful to involve the policy-makers and the drafters in the consultation process. Involving them will lead to a better understanding of the user-regulator relationship and will result in more effective regulations. Depending on the scope of the consultations and the form they take, you may also want to include researchers. Consultation is conducted principally with two groups: users and stakeholders; and public sector administrators. You should consult with both groups at the same time because their differing policy concerns can have a profound effect on the outcome. Consultation with stakeholders should also be conducted from the outset (see section 1.2), to reduce the chances of choosing an ineffective or inappropriate solution.

The examination of policy objectives normally starts with the regulator and extends out, by means of consultation, to the various stakeholder and user groups. The policy is continually tested for effectiveness, with adjustments being made to correct flaws as they are identified.

Consultation will involve selecting target groups and drafting questions to draw out the key issues, tailoring the methods to the users when necessary. The Research and Statistics Section of the Department of Justice may be able to help you in this regard. If the client department has a research or evaluation unit, it should be brought into the project, since it will likely have valuable substantive knowledge about the regulated area that the Department of Justice researchers will not have.

The sponsoring department may also have other internal resources that could help during the consultation phase, such as a Public Affairs Section. The Research and Statistics Section of the Department of Justice has research experience and considerable knowledge about the plain language process, and can provide a useful liaison role in the technical discussions with the client department's research unit. Research is a resource-intensive activity, and the availability of resources will be crucial in determining what ca be done and by which organization.

Consultation may take the form of visits to selected users. If the user group is relatively small or well-organized, one-on-one meetings with representatives may work best. If the group is diverse and largely unorganized, a representative sample will have to be identified and consulted, possibly in the form of a focus-group discussion, to make the process credible. Consultation can also be conducted using client-specific newsletters, conferences and electronic media (e.g. the Internet).

(A) Consult with Users and Stakeholders

The first step is to identify and consult with the users of the proposed regulation and any associated stakeholders. Users can range from the regulator and the compliance and enforcement network all the way to the end user, often the general public. For their part, stakeholders differ from users in that the stakeholders do not directly use the regulations, although they do have an interest in the area covered by the regulations. Stakeholders may include other federal departments, provincial authorities, municipal bodies, international organizations, industry associations or consumer organizations. For example, in the context of an environmental regulation, the users would be the industry that has to comply with emissions standards, whereas the stakeholders would be the general public. Identifying all stakeholders is critical to having a complete, well-balanced and productive consultation process.

(B) Consult with Public Sector Administrators

It is equally important to identify and consult with public sector administrators when shaping the final policy position. Consultation between regulators and administrators at different levels and in different sectors of government is vital. Some public sector administrators are:

• Treasury Board, if the regulation has financial implications;
• departments or central agencies that will have a role to play in the regulatory scheme (such as a scheme that contemplates a cooperative regime between two departments); and
• departments that have relevant expertise in an area affected by the regulation (such as the Department of Justice for human rights issues, Department of the Environment for environmental impact, or Department of Industry for market competition issues).

You should ensure that all potential conflicts that could hamper the regulatory initiative are resolved at this stage. While initial consultations will have covered much ground, you may need to consult further as the regulation is refined. Consultation produces a well-thought-out policy document that forms the basis of sound legal drafting instructions or draft regulations. With a consultation-tested policy document in hand, you can tackle the legal drafting process with confidence.

2.2 Prepare a Detailed Plan of the Regulation

To prepare a draft regulation you will need a detailed plan. A regulation should always be organized in logical order. The text should unfold progressively so the reader can understand the document without having to skip ahead to refer to later sections. Some degree of flexibility in the organization of regulations is acceptable, but logic and ease of use are the paramount considerations.

Definitions should appear at the beginning, followed by the general rules and, finally, the particular rules, penalties and exceptions. Although it is not always possible to follow this structure, a coherent and logical plan of some sort is critical. More guidance on the organizing of regulations is given in Section 4 of the Guide. This exercise will help ensure that the text is complete and that every aspect of the problem has been covered. You will be in a better position to identify missing elements and conceptual flaws. Resolve problems as soon as they are detected. Problems may be the result of an over sight, or they may be symptomatic of a fundamental error in policy conception. Either way, the issue should be addressed and resolved before drafting begins. To draft before the policy is finalized is usually counter-productive. Any perceived time savings made by doing so will eventually be lost. To a certain degree, it is inevitable that the drafting process will test the soundness of the policy and fuel new policy developments. These developments will in turn raise legal issues which will need to be assessed and which may lead to refinement of the regulatory scheme. However you should try to avoid the inefficiency of constantly drafting and revising while the fundamental policy continues to evolve. Usability tests should not reveal policy questions that remain undecided.

2.3 Select What to Put in the Regulation

When developing a regulation, you should remember that, once it is made, every change to it must follow the regulatory process. The regulatory process takes time and, given the number of people involved, is costly. In order to minimize future amendments to a regulation, it is important to separate what is essential to include in the regulation from what can be dealt with elsewhere. The regulations themselves should set out the general rules or standards of behaviour and provide criteria for applying those standards. Administrative documents such as policy guidelines and directives can provide the detail on how the criteria are to be applied on a case-by-case basis, but these documents will not have the force of regulations.

Ideally, each section of a regulation should be assessed in terms of the frequency of possible future amendments. It is also important to figure out how much detail you really need in a regulation. Usually, the more detailed regulations are, the more difficult it is to read them and the more likely they are to be amended. Therefore, details that are not necessary to achieving the objectives of the regulations should be communicated through policy documents instead.

2.4 Prepare the Regulatory Impact Analysis Statement (RIAS

This section of the Guide will help you prepare your Regulatory Impact Analysis Statement (RIAS). A RIAS is required under the Government of Canada's regulatory policy, and is used to demonstrate to the public that all of the policy requirements were addressed when the regulation was being developed. The RIAS has six sections:

• Description: outlines how the regulation will work and why it is needed.
• Alternatives: demonstrates that alternatives were considered, and describes them.
• Benefits and costs: quantifies the reglation's effects.
• Consultation: shows the nature of discussions held with users and stakeholders.
• Compliance and enforcement: discusses the expected means of ensuring compliance.
• Contact person: identifies the person best able to answer questions.

Applying the following checklist will ensure that your work complies with the government's regulatory policy:

• Writing Style:
  • Are the conclusions that you want your audience to arrive at clear in your own mind?
  • Have you addressed the concerns of your audience?
  • Do your arguments lead logically to your conclusions?
  • Have you put what is most important first?
  • Are your sentences short and is your wording clear?
  • Have you kept technical language to a minimum?
• Description:
  • Have you defined the situation succinctly?
  • Can your readers quickly establish if and how the regulation will affect them?
  • Have you shown why regulatory action is necessary?
  • Have you described the solution that the regulation or amendment is intended to provide?
  • Have you set out the context of the regulation succinctly?
• Alternatives:
  • Have you clearly described the alternatives to regulation and any alternative types or forms of regulation that were considered?
  • Did you explain why the alternatives were not selected?
• Benefits and Costs:
  • Have you shown that the costs and benefits you predict are realistically proportionate to the impact of the regulation?
  • Have you provided a cost-benefit analysis?
  • Have you assessed which groups or interests will bear the costs of the regulation, and which will receive the benefits?
  • Have you incorporated quantitative analyses of repercussions, operating costs and direct benefits of the regulation, as well as any repercussions on inflation and employment?
  • Have you included costs to industry, the public and the government, including enforcement costs?
  • Have you made a qualitative assessment of those effects that do not lend themselves to a detailed quantitative analysis?
  • Have you identified any possible environmental effects?
• Consultation:
  • Has notice of the regulation been given in the Federal Regulatory Plan and has the regulation been published in the Canada Gazette, Part I (if the regulation is not exempt from being pre-published)?
  • Who was consulted?
  • What consultation mechanisms were used?
  • What were the results of the consultation, and how was the regulation changed as a result?
  • Have you identified any groups still opposed to the regulation (and named them in a Supplementary Note to ministers)?
  • If the text of the regulation has been revised so that it reflects and responds to comments received after its pre-publication, have necessary changes been made to the RIAS?
• Compliance and Enforcement:
  • For a new regulation, have you explained the enforcement mechanisms and described the penalties for noncompliance?
  • Have you described the means which will be used to detect noncompliance?
  • For amendments to a regulation, have you described how the need for enforcement has changed as a result of the amendment?
• Contact Person:
  • Have you included an address that is complete enough to enable people unfamiliar with the government to get through easily, and a fax and phone number and an e-mail address?

REFERENCE DOCUMENTS

For more information on preparing a RIAS, refer to the following Treasury Board Secretariat publications:

• RIAS Writer's Guide (1992).
• Assessing Regulatory Alternatives (May 1994) Benefit-Cost Analysis Guide for Regulatory Programs, Summary (1995).
• Regulatory Policy (Nov. 1994).

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