On a cold day in late March 2011, 30+ individuals met to assess regulatory reform as a cross-governmental Canadian challenge. Although each faced different subject-matter challenges within their home agencies and departments, the curiosity was there to see if there were more global patterns that affected the entire community, and ways that the community could learn from, and work with, one another in a more collaborative way.
To enable this discovery process, the facilitator took the assembled participants through a whole-systems analysis of the Canadian regulatory environment, spanning from the 1950s and 60s through to 2030 and beyond. What follows is a synthesis of this conversation.
While a 12 Windows conversation is not an in-depth research effort carried out by a single subject matter expert, and therefore cannot provide absolute comprehensiveness, nor absolute veracity, it does offer a highly accurate reflection of the environment, trends, challenges and opportunities as seen by 30 subject matter experts, challenging one another through curiosity and insight throughout the course of a collaborative engagement process.
This conversation was only the beginning of a larger, and longer, conversation that needs to take place around this matter, but it was deemed both reasonable and useful in its reflection of what has happened, what is happening, what may happen and what may be useful, necessary steps in service of the public interest of all Canadians, as seen through the lens of regulation.
1. The Past
Participants agreed that the most useful starting point for an analysis of the past was to start from a time when things were substantially different and to go back to the 1960s – back when many participants were only children, and some were not even born. They painted a picture of a growing nation, and of Canadians who were finding their voice as a population. One of the things they, in concert with citizens in many countries, told their government was that SAFETY was a critical issue and that they expected their government to take responsibility for ensuring their safety in a number of venues. From food, to fisheries, industry, work environments, and product development (in almost every area where governance could be applied to ensure a baseline expectation of stability and safety), the Canadian population expected the government to act. And act it did.
With the perfect vision offered by hindsight, today’s citizenry can look at the current regulatory framework, much of which was put in place in the mid-20th century, in a somewhat paternalistic, command-and-control tone. In point of fact, much of Western culture followed that model during that time period, so it is not a surprise to see that legislation and the ensuing regulatory framework that was built to serve the public interest at that time was highly paternalistic, very prescriptive and process-based. It made sense, it was how we approached our world in those times. The approaches were highly reductionist, because that was how business was done.
It is easy to see this era critically, but many of the great public health campaigns about basic common sense applications of hygiene and standard were put in place during this era, and they no doubt made for a stronger and healthier basic infrastructure and populace that was able to become what it is today.
We used to live in an environment with majority governments and fewer political parties. There was the feeling expressed in the room that there was more visionary leadership shown in that era. Public policy was largely nationally (as opposed to globally) focused. The things that affected us, the risks we had to manage and control, were largely seen as things happening within our national boundaries. The industries that were regulated were Canadian industries, not Industries operating in Canada. It was an era of “Big Government”, where the government was the major information provider to Canadians. Industry only spoke to us through marketing and advertising. Government had a strong enforcement arm, and industry had to comply. Things could be controlled, it seemed.
If participants chose the word “SAFETY” to outline the primary concern of Canadians in this public-interest-focused conversation, the one word that summed up Canada and the world it operated in was “SLOW”. And of course, that was about to change.
2. Past to Current State – Shocks, Trends and Changes
A number of trends were discussed, all of which had bearing on how the current legislative and regulatory environment has become what it now is. A few were mentioned in the previous section:
- Everything has become international in scope. We no longer have “Canadian industry,” we have “industry operating in Canada.”
- It is no longer sufficient to focus on risks within our own borders. Man-made and natural disasters, changes brought about by science and technology in all fields, and a highly mobile global population (among many other elements) have created an environment where we need to manage risks that could potentially emanate from anywhere on the planet.
In addition to these, a number of other key changes have affected the environment, and are mentioned here, in no particular order:
- The liberalization of trade worldwide has had profound effects on our regulatory system, and makes it much harder to define the public good, particularly due to the next change:
- As Canadians, we have changed our expectations of our government (in some spheres at least). We do not want to be PROTECTED (SAFETY); rather, we want to be informed of risks, so that we can make our own decisions. Curious creatures that we are, we want only to be advised of the risks of bungee jumping, so that we can make our own choice as to whether we jump off the bridge or not – but we expect the cord that keeps us from hitting the ground to have passed stringent regulatory testing!
- Smaller government has made for profoundly less enforcement and testing regimes. There is an insufficient number of inspectors available to perform the quantity of tests that were once done. This change has forced self-regulation on industry, and has forced much more risk management by a smaller government that cannot have the control that it once did, owing to having far fewer resources available.
- Government changed, in that movement between departments was seen as a positive thing. Subject matter experts with deep expertise gained over decades in the same role were no longer. Public servants became administrators with more management skills, but often with fewer deep subject matter area skills. As the aging workers retired and much acquired knowledge was lost, as there was not the follow-on cadre of public servants who shared the same goals and career paths.
- Most importantly, the world became what it is today: FAST. Information moves instantly. Prodigious amounts of information. People make choices based on a much larger information set; how they travel, what they buy, how they live. All of this is based on analysis that was not conceivable even one generation ago. The world lives and works 24 hours a day; news is constantly available from every corner of the planet. And, with a stronger and more resilient internet, everyone everywhere is capable of connecting to everyone else, instantly.
- Not only does information travel quickly, but people, and products of all sorts, travel around the world. We shop globally and we can get almost anywhere in the world in 24 hours or less (and everywhere in 48). When food safety laws were being developed in the mid-20th century, who would have guessed that it would be economically viable to grow blueberries in Chile in February, put them on an airplane, and sell them in Canada? The risks and the challenges are a level of complexity that could not have been foreseen by our forefathers when they put the current regulatory framework in place.
3. Current State
As mentioned previously, Canadians today value CHOICE. Their definition of a government that serves the public good is one that provides information, and then lets Canadians choose their own way (while keeping the bungee cords safe, of course!). Program review and persistent cutbacks have led to a much smaller government with far fewer resources, one which has less capacity available, but which is facing greater and greater levels of change, and change shocks within the global system.
With more information in hand, Canadians are forcing change. They are in direct communication with industry and with government, and they expect change – and quickly! Industry is also able to communicate directly with Canadian consumers. The cost to communicate, through all media, has decreased substantially over the past 50 years.
The face of Canadian industry has changed substantially. Innovation occurs far more quickly, and it occurs in small to medium enterprises that often do not have the resources (time, money, skill, connections) to engage proactively with government to ensure that their innovative products mesh smoothly with Canadian laws. They often struggle to get product into the current system, and find it overwhelming to deal with government. Innovation occurs in Canada at a healthy pace, but monetization of those innovation often happens in other countries, where it is simpler to get products – good, needed products – through a regulatory framework that often is seen as working counter to the public good.
In the departments and agencies that manage the public interest, there have been some beneficial changes, but these have been more than offset by hindrances. An environment that relies on performance measurement and accountability is a positive sign, but the performance that is managed is still often the process, and not the outcome. Accountability exists, but often at a level far removed from the place where decisions need to be made, on a day-to-day basis. The bureaucracy is still neither open nor transparent – in fact it was felt that the political levels of government were possibly more open than the bureaucratic levels at this time.
A bureaucracy that is not open impacts industry heavily. Not knowing what is coming in the way of legislative change, not knowing where a product is in the review cycle, how long the typical review cycle might be, or precisely what is required to ensure that a product successfully passes through that cycle was seen as a bureaucratic, and not an political, hindrance to success.
In an environment which is fast and seen as getting faster, where individual choice is seen as a right, where the availability of information is continuously increasing along with complexity of operating at all levels and from the inspector to the policy analyst, the leading politician, the business leader or the individual Canadian, the question remains: “how do we get ahead of the curve?”
4. Future State
The catalyzing phrase from the day was that the future would hold “change at the speed of breath.” With applications like Twitter providing us instant person-to-person updates around the globe, it is easy to see how the wind off a butterfly’s wing in Milan might change the future of an exploration in Greenland. Our world is becoming that integrated – at the speed of breath.
In order to puzzle out how departments and agencies may choose to work in the future with reasonable context in place, the participants were asked to consider a future in 2030 where they worked in service of the public good, and where the goal was “to enable choice while limiting harm.” The following are some of the insights from the discussions that took place.
Participants spoke at length of “Choice Frameworks” – information, boundaries and guidelines that supported Canadians in their quest for personal choice. These Choice Frameworks would need to be matched up against Choice Architectures at the government level (mentioned below). Participants spoke of an older Canadian population: needing different messaging, interested in different products, expressing different vulnerabilities, as we enter the 2030s. A moment of clear insight came when participants realized that the information flows went not only from Canadians to Government (both departments/agencies and Whole of Government) and to Industry, but additionally that increasingly, self-feedback loops would offer information in the public interest to Canadians, created and synthesized and made available by Canadians. The public will have a new role in maintaining the public good by aiding enforcement and compelling industry to accept social responsibility. Will transparency increase the general level of public trust? The hope is that it might. We definitely live in a highly cynical age at the beginning of the 21st century.
Success indicators for the Canadian Public mentioned were:
- More valid information to inform choice and to change consumer behaviour.
- Open engagement to foster trust with citizenry through greater transparency.
- Protection of the public good deemed as more important.
- A public sense of ownership of regulations – more buy-in due to greater overall comprehension of what they are, why they are in place, and what outcomes they seek to serve.
- Government doing its job protecting Canadians, and being appreciated for doing so.
Industry will have shorter and shorter product life cycles, and be in a constant state of innovation.
Success indicators for Canadian industry (and industry operating in Canada) included:
- Industry maintaining public trust by exceeding regulatory baselines.
- Less red tape, greater predictability of the government/bureaucracy, greater clarity of expectations on the part of government towards industry.
- Harmonization across all departments and agencies, and with other countries, giving Industry instant multi-country accessibility by meeting Canadian standards.
- Scientific evaluation seen from a positive point of view internationally.
With those intended future states in mind, the question remained: “what needed to be done to get from here to there?” Although, as stated earlier, this was only a preliminary ideation event, some fascinating, and workable, insights came forward. They are mapped out here.
A highlight of a workable future regulatory environment was one that regulated in accordance with values. Well framed, but not easily done, as the assembled participants agreed. A future regulatory environment that served the public good would have to be outcomes or results-based. It would be citizen-centric, and have the transparency to be tested and trusted by the citizenry. It would have the resiliency to manage with increased uncertainty and complexity, and would offer guidelines rather than prescriptions. It would offer devolved decision-making that was supportive of line staff. A critical element would be that it would allow for failure. A system that does not allow for failure will not allow for timeliness of action, innovation, or accept the humanity of making decisions in an uncertain environment.
The science of decision-making under uncertainty will have to play a part in the regulatory frameworks of the future. Choice Architectures, underlying programs that enabled long-term population shifts in service of greater public good, would need to be developed, using behaviour economics. All of this is new, none of it is easy, but all of it is seen as essential to making the fundamental shift.
The future was seen to be one of international approaches, global markets, international standards, ongoing multinational collaboration, international recognition of decisions. Holistic systems approaches will come to be the new norm. Management models will support integration and interdisciplinary work – explicitly, and not as tacitly as now.
In a holistic way, the government will be called to enter the role of convenor and facilitator by engaging openly to engender greater trust, drawing on crowd-sourcing through collaboration, and developing more comprehensive information sharing methods that support the choice architectures and enable Canadians to feel safe and supported in making useful decisions with meaningful, accurate information.
Participants came up with a number of possible “how” actions in support of this transition:
- Provide choice frameworks to “all” of the population; understanding that there will be varying degrees of interest in these frameworks by more and less motivated portions of the overall population.
- Educate the media, so that the information they provide is more useful, more comprehensive, less sensational, more bounded in common sense and less in perceived risk and shock value.
- Regulate only key pieces of the pie leaving most of the process open to innovation, and trust in the wisdom of inspectors to interpret the regulations in support of the public interest.
- Design regulations that are more rational, less prescriptive.
- Collapse the decision-making process as far as necessary (and no further).
- Offer sophisticated guidance to industry and Canadians.
- Assess the ethics in all situations.
- Develop the capacity to pull together interdisciplinary teams – instantly.
- Perform more interdisciplinary work.
- Tap into the expertise of retirees to make more effective use of this resource.
It was broadly agreed that incremental change could not enable the above future state. Incremental change in support of managing current requirements was necessary, but that fundamental, transformational change at a level above the current resource level was necessary for a new regulatory environment to come into existence.
5. Strategic Principles
At this point in the discussion, having determined that the remaining conversation was much longer than the remaining time, and agreeing that continuing the conversation was both useful and necessary, the participants chose to develop the first cut at a set of Strategic Principles that might guide all departments and agencies as they begin this process of regulatory transformation.
These principles included:
- The use of Plain Language.
- The offer of advance regulatory engagement, a regulatory handshake for regulatees.
- Openness and transparency – bureaucratic, not political (the political wasn’t seen to be the issue), with administrative procedures made public.
- Clarity around regulatory outcomes, supported by clear baseline compliance levels and performance measurement supporting both sunsetting and evergreening, as required – all in support of innovation.
- The establishment of clear government service standards for industry.
- Ethics integrated into the regulatory process, informed by international standards (ISO, UN Declarations, etc).
- The creation of a public risk indemnification fund. With risk a necessary part of innovation, create a fund from which innovators could draw to make investments into research that would mitigate the risk elements in innovations that are brought to market. This fund was seen as being designed specifically to mitigate risks through research, NOT to pay out injured parties.
- Extended emphasis on the evaluation of instrument choices, NOT just choosing regulation every time, but considering other potential instruments to manage outcomes.
- Outcomes-based regulations with no prescriptive language.
- Clarity on regulatory intent; clarity on the regulatory system.
- Effective collaborative mechanisms interdepartmentally – with rules of engagement that support joint accountability and collective governance.
- Goal of imposing the least/lowest non-essential administrative burden on business.
- Clarity around incorporation by reference – an accessibility issue.
- Systems thinking – and resiliency testing.
- All of this (above) enabling responsible choice.