Ontario Regulatory Update

After One Year of Ford Government, Regulation is Down, But Not Out

July 12 marked one year since the Ford Government’s Speech From the Throne, which set out the government’s legislative agenda and focus. The Ford Government’s agenda is to make Ontario ‘Open for Business’ and has declared war on red tape. In today’s Ontario, regulation is a 4-letter word (or, if you prefer, a ‘blunt’ instrument).

Of course, much has happened in the past weeks, let alone the past year: a major Cabinet shuffle; the departure of Dean French as the Premier’s Chief of Staff; and several patronage appointment controversies. As we noted in our analysis, June’s Cabinet shuffle marks a ‘reset’ for the Ford Government – expect a change in tone and approach with stakeholders, but not a change in policy (as the government still has its electoral and legislative mandate). Predicting what to expect in the year ahead is still best served by a look at the Ford Government’s past performance in Year 1.

What does that record show? A laser-focus on bringing down the regulatory burden and the cost of doing business in Ontario. But, also, the continued introduction of regulations and measures to regulate particular industries. And this reality could have a material impact on your organization, particularly if you’re not actively monitoring what is happening with government.

Focused on Reducing the Regulatory Burden

The Ford government is clear on the intention to cut red tape. After all, when the Deputy Ministers were unveiled (on the same day as the Cabinet), the group included a Deputy Minister strictly devoted to red tape and regulatory burden reduction.

The 2018 Fall Economic Statement made clear the scale of the ambition: a target of a 25% reduction in red tape by 2022, with “one high-impact burden reduction bill each spring and fall throughout” the Ford government’s mandate.

To put this in context: according to the Fall Economic Statement, there were about 380,000 regulatory requirements in Ontario. So, the Ford government is looking to eliminate about 95,000 regulations over its 4-year mandate. Stated another way: the Ford government is looking to eliminate about 65 regulatory requirements a day, or about 3 every hour, of their mandate.

The responsible Deputy Minister is tasked with reporting to Cabinet every two weeks on the regulatory reduction progress. Stakeholders should not then be surprised political and bureaucratic officials are always seeking examples of red tape or regulatory burdens to cut.

We’ve been advising clients since last summer to proactively identify any opportunities to cut red tape, reduce a regulatory burden or deliver a program or service more efficiently; we’ve achieved results for clients as a result. The Ford Government is always looking out for these types of opportunities, whether or not it’s in a policy area currently under consultation or focus.

…But Still Actively Regulating

As I’ve highlighted before, the Ford government is moving at light speed (government-wise). In this first legislative year, 24 pieces of legislation were introduced and 20 of them received Royal Assent. A short summary of each of these pieces of legislation can be found here. The 4 Government bills remaining were either introduced just before the summer recess but are likely to pass early in the fall session (for example, the public sector wage restraint legislation) or have been abandoned because they’re no longer necessary (for example, the legislation invoking the Notwithstanding clause regarding the size of Toronto City Council).

And, generally, with new legislation comes new regulations. For example, as of July 9, 2019, there were 13 active proposals listed on Ontario’s Regulatory Registry (even though the Legislature broke for the summer over a month ago).

The Ford Government introducing regulations, while also trying to reduce regulatory burdens, isn’t a contradiction. Part of it is an ongoing trend: governments used to put most of the substance in the legislation; now substance is largely in the regulations. Generally, this change is part of making government nimbler and more responsive – it’s easier and quicker to amend regulations than it is to amend legislation.

Take the new Combative Sports Act, 2019 (which was Schedule 9 of the budget implementation bill). The legislation it replaced, the Athletics Control Act, was outdated. Many standards enshrined in that Act had evolved, but the legislation hadn’t been amended, so competitions had to abide by different rules in Ontario than essentially everywhere else.

With the Athletics Control Act, any changes – no matter how small – had to go through the lengthy legislative amendment process (First Reading, Second Reading, Committee Consideration, Third Reading and Royal Assent). Under the Combative Sports Act, there will be an advisory council to advise the Minister on the most up-to-date rule changes for each sport and then the Minister can update the rules through regulatory changes (posted to Regulatory Registry for time-limited comment period and then can be implemented).

How This Can Affect You and Your Organization

The ease with which government can change rules through regulatory changes and the trend toward greater rule-making through regulation, though, presents a potential problem for organizations or companies. While introducing or amending legislation gets a lot of fanfare, regulations generally fly under the radar (to be clear, not due to some malicious intent).

Even organizations actively engaged in government relations can miss some of these. Too often, we’ve been approached after the fact by organizations that have experienced a major disruption from a regulatory change they didn’t realize was coming. You’re busy doing your job. But, simultaneously, government is busy doing its job. Without someone actively monitoring these developments – like we do here at Sussex – it is easy to miss these potentially impactful changes.

In Ontario, regulation may be on the run, but it will never be an endangered species. The Ford Government presents everyone with an opportunity to eliminate burdens they’re currently experiencing…and also requires an active approach to stay on top of regulatory changes. We can help on either of these.

In summary, organizations should:

• Look for opportunities to reduce red tape, and take those to government;
• Watch out for new regulations that affect them and/or their industry; and
• Get involved during the regulation posting process.

Please feel free to give us a call to discuss.