By Mike Beale

RGI’s latest case study[1] The Dog that Doesn’t Bark — Federal Regulation of Industrial Air Pollution in Canada pays homage to Sir Arthur Conan Doyle and Sherlock Holmes.  In a well-known story, Holmes solved a murder mystery by pointing to the .  “The dog did nothing in the night-timeâ€�, countered the Scotland Yard detective on the case.  â€œThat was the curious incidentâ€� replied Holmes.

The dog in question (no disrespect intended) is ECCC’s regulation of industrial air pollution, and the case study addresses the question “why doesn’t the dog bark?â€�.  It seems like a pertinent question given that estimates that air pollution accounts for 15,300 premature deaths annually in Canada, and that all the key air pollutants are on °ä²¹²Ô²¹»å²¹â€™s list of toxic substances, giving ECCC full authority to regulate emissions.  And yet there are only a handful of federal regulations addressing air pollution from industrial/stationary sources.

There are reasons that help explain ECCC’s relatively low profile in this area:

• Since its creation in 1971, ECCC has consistently played a secondary role to the provinces in the regulation of air pollutants from industrial sources; this despite promises in 2006-07 that ECCC would play a more active role. ECCC’s secondary role did not prevent °ä²¹²Ô²¹»å²¹â€™s acid rain program of the 1980s and ‘90s from being a success story.
• °ä²¹²Ô²¹»å²¹â€™s current framework for management of air pollution – the Air Quality Management System (AQMS) – was adopted by federal, provincial and territorial governments in 2012. It calls for provinces and territories to have the opportunity to be the front-line regulator.
• ECCC has acted on industrial air pollution indirectly, through greenhouse gas regulation; phasing out coal plants, for example, reduces air pollution as well as GHGs.
• °ä²¹²Ô²¹»å²¹â€™s air quality is good by international standards – many would argue that our approach to air quality management is an example of °ä²¹²Ô²¹»å²¹â€™s federation working effectively.

On the other hand, it is striking that:

• AQMS is essentially the same model of federal-provincial collaboration that existed in the 1970s[2]; ECCC’s role has evolved in other areas but not in this one.
• In particular, ECCC’s proactive approach to regulating industrial GHG emissions and water pollution has not been matched on air pollution.
• There appear to be gaps in the system, in particular with respect to air pollution from .
• The American dog down the street (the US EPA – no disrespect intended) is quite noisy by comparison.

In a sense, the case study is getting at what should be the expectations for a modern, world-class, federal environmental regulatory agency.

Is the federal approach to industrial air pollution regulation a success story or is there room for improvement?  Read the case study and form your own opinion.

[1] This case study is intended to be used as a teaching tool.

[2] See Kathryn Harrison, Passing the Buck: Federalism and Canadian Environmental Policy, UBC Press, 1996, p105.

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By Mike Beale

RGI’s new case study, °ä²¹²Ô²¹»å²¹â€™s Fisheries Act: the Evolution of a Modern Pollution Prevention Regulatory Regime tells the story of how °ä²¹²Ô²¹»å²¹â€™s federal water pollution regime evolved over a 150 year period to what it is today.

For those not immersed in this issue, the Fisheries Act is the legal basis for °ä²¹²Ô²¹»å²¹â€™s federal water pollution regime. The Act takes an unusual approach to pollution prevention: a general prohibition against pollution in the Act itself, while the regulations under the Act permit pollution under specified conditions. The list of activities covered by regulation continues to expand, and the regime is actively enforced.

The Act dates from 1868, and the original Act contained wording for the general prohibition that is quite similar to what is in the Act today. What is different is today’s regulatory provisions, which date from 1970, and the regulatory structure that continues to be built out pursuant to those provisions.

The case study traces the evolution of the pollution prevention provisions of the Act, and their enforcement. Drawing on by Peter Gillis, it reviews House and Senate debates in the 1890s on how waste from saw-mills should be treated under the law. It concludes that, if anything, the original pollution provisions in the Act were too strong, too all-or-nothing; the result was exemptions and uneven enforcement.

The case study then discusses in detail the amendments made to the Act in 1970, under the leadership of Fisheries Minister Jack Davis. While Cabinet and House of Commons debates focused on other aspects of the proposed amendments, the passage of time demonstrates that their major contribution was to add a workable regulatory structure to the Act.

The case study goes on to review the development of the suite of Fisheries Act regulations over the last 50 years; key innovative features of those regulations, including adaptive management; and how the regulations as well as the general prohibition have been enforced.  It concludes with some lessons learned, and questions for discussion/further research.

Lessons that emerge from the case study include:

• It can take time – in this case, 100-plus years – for a piece of legislation to realize its full potential.
• Ironically, adding a permissive regulatory regime to the Act in 1970 made it more effective – what might have appeared to be a weakening was actually a strengthening.
• Adaptive management – in this case, through environmental effects monitoring – can be built into a regulatory structure.
• Political leadership matters; reviewing the debates around the 1970 amendments – both within Cabinet and in the House of Commons – it seems evident that these amendments would not have happened if someone less able than Jack Davis was Minister of Fisheries.
• When it comes to environmental legislation, being simple and focused, and having clear constitutional authority, are key ingredients for success.

I hope you are tempted to read further.

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By Mike Beale

Last summer I had the occasion to immerse myself in the world of public policy as seen through an academic lens. I had agreed to participate as a panelist at an academic conference, and review three textbooks from my practitioner’s perspective. I must admit, I didn’t fully appreciate at the time that reviewing three textbooks meant reading three textbooks[1]…

So I got to learn a bit about how political scientists think and write about public policy. There was a language barrier – I discovered my 36-year career working on policy in the federal government was not a great help in understanding academic textbooks! But once some basic vocabulary had been acquired, it became a rewarding journey.

Of course, I didn’t agree with everything I read. A pretty basic starting point is what is meant by public policy. The generally accepted definition appears to be “.� To me, as a former practitioner, this confuses decisions with policy: governments make decisions all the time, but it is only when they are guided by a framework that one can say a policy exists.

Does Canada have a climate change policy? I would say yes; decisions are made within the context of the Paris Agreement, the Pan-Canadian Framework on Clean Growth and Climate Change, etc. Does Canada have an energy policy? I would say no. Does it matter? Well, it depends on whether you think government decisions on energy should be made on a case-by-case basis or should reflect a preexisting and hopefully coherent framework.

That said, I do like the implication from the academic definition that non-decisions sometimes matter as much as decisions – certainly the history of environmental policy is littered with government non-decisions.

Otherwise, there was a lot in the literature that resonated positively with this practitioner. I liked the notion of “� – policymakers making decisions based on cognitive and organizational shortcuts – as a more realistic alternative to the ideal of “comprehensive rationality.�

I learned about “,â€� or “â€� – the dominant place of carbon pricing in °ä²¹²Ô²¹»å²¹â€™s policy debate on climate change comes to mind. For some reason, the notion of “â€� also brought carbon pricing to mind. And the description of the policy process as the “â€� seems generally apt, though perhaps a bit generous when it comes to climate change (is the problem actually being managed, and is the management continuous?).

So in sum, I learned to appreciate the contributions of political science to policy thinking.  Not a bad way to spend a summer.

[1] Cairney, , Macmillan; Colebatch and Hoppe (eds.), , Edward Elgar; Weible and Sabatier (eds.), , Westview Press.

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Mike Beale

A bit like Tolstoy’s unhappy families (see Anna Karenina), every regulation has its own story, and its own set of lessons.

Coal-Fired Electricity – a Regulatory Case Study, in a Narrative of Canada-US Harmonization tells the story of °ä²¹²Ô²¹»å²¹â€™s first federal regulations targeting greenhouse gas (GHG) emissions from stationary sources. As well as being the first, these regulations are notable for their unusual design, and for the policy context in which they evolved.

Some of the lessons that emerge from the coal-fired electricity story are as follows:

1. Policy and regulatory development is a long and winding road. °ä²¹²Ô²¹»å²¹â€™s policy approach in fall 2008 was one of moving forward with comprehensive emission intensity regulations, on a unilateral basis if necessary. It transitioned to seeking a North American cap-and-trade system, and from that to matching any regulation the US might bring in. Still under the same government, it evolved into implementing an electricity regulation ahead of US action, with a regulatory design that the US would propose to adopt in part. °ä²¹²Ô²¹»å²¹â€™s regulation has now been law for almost seven years, and has been enhanced under a new government; the US has still not regulated GHG emissions from existing power plants.
2. Harmonization can take different forms, and does not necessarily mean like-to-like. US regulations on air pollutant, mercury and air toxics emissions from coal plants, together with the decline in natural gas prices resulting from the shale gas revolution, have in practice driven significant early closure of US coal plants even in the absence of US GHG regulation. To some extent, therefore, there has been de facto partial harmonization of coal generation policy with the US, even in the absence of a US GHG regulation on the sector; there has certainly been harmonization of outcomes.
3. A specific regulatory design is not inevitable (or, there is more than one way to skin the cat).
   • Was it inevitable that the government would regulate GHG emissions from electricity? Electricity was the third-largest sector in terms of GHG emissions; the largest, transportation, was being regulated; and the second-largest, oil and gas, arguably raised more issues in terms of competitive pressures.
   • Was it inevitable that this particular regulatory design would be chosen? Not at all. In the space of about 18 months from fall 2008 to spring 2010, the same government changed its preferred regulatory approach from an emission-intensity approach to cap-and-trade to a capital stock turnover approach.
4. Simple doesn’t mean stupid – this was a very basic regulation but with lots of tailored provisions
   • Flexibilities can be built into and around any metric, in this case the length of time a facility has to operate. As per the initial commitment of then Environment Minister Jim Prentice, the regulation did not include emissions trading, but it did allow trading of operating time among units in a given company.
   • A simple, targeted regulation can achieve a lot. The estimated emission reductions are significant and relatively certain to occur, being based on mandated plant closures.

I hope you will read further. Happily, nobody throws themselves under a train in this story.

Mike Beale

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, and Graeme Auld

Pretty much every product one buys these days includes some form of label noting an ethical or environmental claim. The coffee you might buy, for instance, may carry a fairtrade label, or the label of the Rainforest Alliance, or a company’s own label, all of which are trying to tell you that you can rest assured that your coffee was grown and processed in a responsible way. Peruse any store shelf and you will see many ethical or eco-labels for an array of products – seafood, jewelry, paper, furniture, cosmetics, and more.

Given their ubiquity, one might assume these are all government run. Some are. Organics, for instance. But just as many, or more, of these labels are backed by environmental groups, companies, or multiple stakeholders working collaboratively. They are also often international programs that try to establish common standards of ethical or environmental performance for globally traded goods, at times when governments have been unable or unwilling to do anything to address potential issues of concern.

This might seem promising. Here is a story of the market providing information to consumers about things they might care about, letting the consumer choose a product with an ethical profile aligned with their values.

However, deeper issues are at play, one of which centers on questions of accountability when rules are being set by organizations that are distant and detached from citizens. Since citizens are unable to hold these private regulators to account via mechanisms such as elections, there is a view that can help. If the organizations setting the standards for an eco or ethical label is highly transparent – providing information about how the standards are made and how they are enforced – then perhaps these labeling initiatives will be to citizen concerns through pressure, shaming and self-reflection.

As much as this may be the case, up until very recently it has been hard to check these claims. Why? Well, information on the transparency of private regulators was simply not available. We do know a lot about certain organizations. The , the , the , as a few examples. But little was known about the whole group of organizations that are now trying to set and enforce ethical and environmental standards for numerous products traded in global markets.

To begin to offer some answers to these questions, in a , we analyzed a group of 113 programs to assess how transparent they are in their decision-making, standard setting, verification, and dispute settlement processes. We also tried to understand why some programs were much more transparent than others.

We found that programs, on the whole, are not that transparent. Programs tended to prefer shallow forms of transparency – like disclosing who is involved in decision-making – rather than deep forms of transparency – like disclosing the meeting minutes of decision-making.

Some programs do embrace deep transparency. Why might this be? We looked at several features of the programs and the context in which they operate for clues. The key findings were than government involvement and participation in the (a membership organization aiming to strength sustainability standards) were associated with deeper forms of transparency. On the other hand, programs that face more crowded markets (defined by product and geography) are less likely to be as transparent. On average, the involvement of non-governmental organization was not associated with a program embracing deeper forms of transparency.

Our work thus casts some doubt on the possibility that accountability is being accomplished through transparency for most programs we studied. Transparency is also considered a key ingredient for those who think of private regulation as experiments from which we can learn lessons for broader regulatory efforts. If insights about successes, failures, and ongoing program operations are not being disclosed, such learning processes seem less likely to occur. And for those in the business of studying regulations, we suggest that we need to be aware that studies of the most transparent programs out there are not likely to generalize.

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Michael Presley

Over the years, Governments of all stripes around the world have tried to come to grips with the fact that their regulatory systems need to be refined if not overhauled.  Recognition of the importance of regulatory reform will only increase as time passes because it remains one of the most important aspects of public administration that has lacked strategic and sustained attention over the years.

°ä²¹²Ô²¹»å²¹â€™s approach to regulatory reform could likely be best described as coming in “fits and startsâ€�. From efforts to introduce “â€�, to “streamlined regulationâ€�, to “â€�, to “â€� characterized by “â€� controls on the growth of regulation, there have been many genuine and well intentioned efforts at reform. But through each of the above efforts there persisted a belief that reforms could be accomplished through a single overarching policy or governance change that would fix the problem once and for all. To date, this naïve search for a silver bullet approach to reforming °ä²¹²Ô²¹»å²¹â€™s regulatory system has produced predictable results. For example, many governments’ efforts to create new wise centrally administered tough regulatory policy that is enforced through a powerful cabinet committee has not, as stand alone reforms, resulted in the improvements their promoters promised.

In Canada, the regulatory system is an underestimated asset to Canada. The notes that in the 2016-17 fiscal year, sixteen of the most significant federal regulatory changes approved by the Treasury Board cabinet committee resulted in a net benefit to Canada of more than $9.6 Billion annually  (total costs were $7.0 billion and benefits were $16.6 billion).  But few Canadians understand how all the moving parts of the system work and these costs and benefits are born unevenly by Canadians.  Industry bears most of the costs and is generally vocal about the need to reduce those costs. Canadians who benefit are often not fully aware of the protection afforded by such measures and so are relatively inarticulate about their impacts.

Canada, like most jurisdictions, has focused at the federal order of government on getting its regulatory policy right and giving its cabinet oversight committee (the Treasury Board) the advice it needs to approve new regulatory proposals that are precise rather than blunt instruments. The regulatory policy is the “� and it is an intelligent and well constructed policy that has evolved over the last ten years into a well regarded foundational element of a good regulatory system. It performs, however, a very limited role in refining the overall regulatory system. The reason it is limited in impact is because it primarily affects the design of new regulatory proposals and does not have much practical impact on how effectively they’re actually implemented and managed on an ongoing basis. Neither does it affect the vast majority of federal regulatory requirements that rarely come to the Treasury Board for review and updating.

Even the best designed and consulted regulatory proposal can prove ineffective if it isn’t well implemented and monitored for its impact. Every regulation is actually an experiment and only careful management, monitoring and adjustments will increase the likelihood that it will work as intended.

The good news is that the current Federal Government has introduced a reform strategy that relies less on silver bullets and more on solid ongoing regulatory management.  It seems to recognize that regulatory system reform is not a “one and doneâ€� task, but an ongoing effort that requires sustained attention, oversight and management throughout the regulatory life-cycle of each program.  The initial innovation and agility priorities of the Government are strategically focused on sectors of the economy where regulatory reforms could produce early wins. The thrust of the approach is on three sectors: agri-food and aquaculture; health and bio-sciences; and transportation and infrastructure. Road maps are beginning to look beyond design questions and towards reforming implementation approaches, inspection practices, and compliance and enforcement efforts.

Of course, the federal regulatory system reaches well beyond these three sectors: the lessons learned there will contribute to the remodeling of regulatory reform road maps emerging in other federal Departments and Agencies. Systematic reviews will be undertaken on the stock of regulations that are rarely critically evaluated. As a complement to these efforts, the implementation of ongoing stakeholder regulatory review advisory groups would give both Departments and Agencies the means to effectively improve regulatory management.

This process is still in its early days, but the philosophy that underpins this latest regulatory reform effort seems more likely to lead to lasting impacts than the “silver bullet� approaches of previous governments around the world.

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Mike Beale.

Hi. Let me introduce myself. I recently departed Environment and Climate Change Canada having spent my career working in environmental and energy policy, the last 13 years of which in a senior environmental regulatory position, and now enjoy the title of Practitioner-in-Residence at ÐÓ°ÉÔ­´´â€™s School of Public Policy and Administration.  Through this blog I would like over the next little while to share my Practitioner’s Perspective on Environmental Regulation.

I start from a few basic principles:

• that environmental policy is in its adolescence as a policy area
• that environmental regulation – defined broadly to include economic regulation such as carbon pricing — is not a tool of environmental policy, but the tool
• that environmental regulation in Canada is at an even earlier stage of development than environmental policy writ large.

John Braithwaite, David Levi-Faur, Jacint Jordana and other scholars have pointed to the global expansion of regulation, in all policy areas, over the last 50 years or so.  As markets have become more vibrant, so has regulation – they have coined the term “regulatory capitalismâ€� to capture this idea. Braithwaite’s is a powerful illustration of this phenomenon.

Consistent with this global trend, Canada has seen rapid growth in federal environmental regulation since about 2002, as demonstrated in the chart below (personal communication from Environment and Climate Change Canada). As you may imagine from my background, and the principles above, I see that as a good thing!

In my work at ÐÓ°ÉÔ­´´ I will be writing a series of case studies based on some of these recent regulations, and will provide updates and discuss some cross-cutting themes in this blog. First case study out of the gate will be the coal-fired electricity regulations of 2012!

Some of the themes that will be explored in these case studies and blog posts include:

• Simple doesn’t mean stupid – you can build innovation and flexibility into even the most basic of regulations
• Keep your eye on the ball – never forget what the real issue is
• Prescriptive vs. outcome-based – well, it depends
• There’s always a way — smart regulatory design can achieve multiple objectives
• Administrative costs matter too
• But we want to be regulated
• There’s always something new…
• Dancing with provinces
• Growing Eco-up (I will explain…)
• Above all, listen

So much to write about.  Stay tuned.

Mike Beale

Environment and Climate Change Canada

Regulations and Equivalents* in Force and Projected

    * â€œEquivalentsâ€� includes Orders and significant amendments to regulations and Schedules

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