Monday, October 06, 2008

Regulatory Modernization Council: Wall government turns policy making over to business lobby group Canadian Federation of Independent Business

Marilyn Braun-Pollon, Premier Brad Wall and Laura Jones

“We hope Saskatchewan will adopt CFIB’s plan to institute regulatory transparency and accountability and make some much needed reductions in red tape in order for its citizens to unleash their entrepreneurship and look forward to limitless opportunities for years to come.”
– Marilyn Braun-Pollon, the CFIB Vice President of Saskatchewan and Agri-Business, in an Apr. 7, 2008, letter to Premier Brad Wall, urging the Saskatchewan Government to pass a Regulatory Transparency and Accountability Act.

“The Saskatchewan government has expressed serious interest in passing legislation along the lines we are suggesting in this letter.”
– Laura Jones, the CFIB Vice-President of Western Canada, in an Apr. 8, 2008, letter to Hon. Rick Thorpe, BC Minister of Small Business and Revenue, requesting the BC Government to pass a Regulatory Transparency and Accountability Act.

“Your correspondence is timely as our Government has recently committed to minimizing excessive business red tape by modernizing and stream-lining our province’s regulatory system. Enterprise Saskatchewan will be the lead agency for this initiative, and they will certainly be seeking your organization’s input in both the initiative’s detailed planning and delivery activities.”
– Premier Brad Wall response to Marilyn Braun-Pollon, May 8, 2008
The Canadian Federation of Independent Business (CFIB) is pressuring the Saskatchewan Party government to adopt a Regulatory Transparency and Accountability Act.

The Wall government’s announcement on Sept. 17, 2008, that a Regulatory Modernization Council (RMC) has been established appears to be a step towards bringing that about.

The RMC will guide and direct regulatory reform and business service priorities. The Council will:

– Provide advice regarding proposed regulatory and service programs and policies;

– Make recommendations to the Enterprise Saskatchewan (ES) Board of Directors; and

– Assist the ES Board in monitoring progress towards meeting regulatory and service enhancement goals.

The RMC is comprised of seven members from various sectors of the business community.

The members of the RMC are:
- Ms. Marilyn Braun-Pollon, Vice President, Canadian Federation of Independent Business (CFIB), Regina;
- Mr. Kerny Korchinski, President and CEO, Frontier Peterbilt Sales Ltd., Saskatoon;
- Ms. Bev Monea, Partner, G. Monea and Associates, Assiniboia;
- Mr. Richard Rumberger, CEO, Candle Lake Golf Resort, Candle Lake;
- Ms. Shirley Ryan, Executive Director, North Saskatoon Business Association, Saskatoon;
- Mr. Bob Schutzman, Director of Environmental Affairs Canada, Evraz Inc., Regina; and
- Mr. Ben W. Wiebe, Chairman and Partner, Stark & Marsh Chartered Accountants, Swift Current.

[Note: The government news release provided a contact name within the Ministry of Enterprise and Innovation (EI) for those wanting additional information. The ministry was contacted on Sept. 17 & 23, 2008, for details regarding the selection process for the council, including the screening criteria that were used, who selected the members and the rate of pay, if any, for their services. Despite assurances by the ministry that an answer was forthcoming there has been no further response.]

The appointment of Braun-Pollon to the council is no coincidence. The CFIB and the Saskatchewan Party have developed a close relationship over the years.

Wall became leader of the Official Opposition Saskatchewan Party on March 15, 2004. He replaced Elwin Hermanson, who resigned after leading the party to defeat in the 2003 provincial election, and wasted little time in reconfirming his support of the CFIB.

“My party has had a very good relationship with your organization through the years and that will absolutely not change under my leadership. The position the CFIB puts forward, for the most, reflect our own,” Wall said in a in a March 31, 2004, letter to Braun-Pollon.

In Dec. 2004, Wall recruited Braun-Pollon and other business leaders in Saskatchewan to join his party’s fight against the NDP government’s plan to implement most available hours of work legislation.

“I encourage you to urge business owners to participate in our “Stop the Job Killing Monster” Campaign which can [be] accessed on our website…I would also like to offer my cooperation and any resources which may be of assistance to the Saskatchewan Business Council in opposing this policy of government directed hours,” Wall said in a Dec. 14, 2004, letter to Braun-Pollon.

“It is my belief that if we work together, we can defeat this insane labour policy,” Wall said.

More recently are another pair of letters between Wall and Braun-Pollon.

In a Jan. 14, 2008, letter to Wall, Braun-Pollon enclosed results from two CFIB mandate surveys it conducted with its members in Saskatchewan. The public policy issues covered included: municipal taxation, pensions, automobile expenses, environment, small business corporate tax, regulation, counterfeit products and the Canada Revenue Agency.

“We trust you will find this Mandate information useful and that it will assist your government in policy development that is sensitive to small businesses in Saskatchewan,” Braun-Pollon said.

In his Jan. 29, 2008 response Wall said “The information you have provided will be very useful in keeping our government connected to Saskatchewan’s business community. As we continue to work to better serve small business, this feedback will give us the opportunity to shape policy that speaks to these priorities and encourages growth.”

On Nov. 27, 2007, the Saskatchewan Party government announced that Dale Botting had become the new deputy minister of EI and will lead the “design-build” phase of the establishment of Enterprise Saskatchewan. The appointment was effective Dec. 1, 2007.

According to records obtained from EI under The Freedom of Information and Protection to Privacy Act, one of Botting’s first scheduled meetings in his new job was with Marilyn Braun-Pollon at the Hotel Saskatchewan on Dec. 11, 2007. The purpose of the meeting is not known.

Braun-Pollon took over from Botting as the CFIB’s new director of provincial affairs in July 1997, who left the organization in late 1996 to become executive director of the Saskatchewan Association of Rehabilitation Centres (SARC).

In the early 1980s Botting was a senior policy analyst on resource policy, regulatory reform, and organizational development in Grant Devine’s Tory government.

On Feb. 11, 2008, Botting again met with Braun-Pollon, but this time the meeting included EI Minister Lyle Stewart and Premier Brad Wall. The meeting took place in Room 306 of the Legislature Building.

An Apr. 7, 2008, letter from Braun-Pollon to Premier Wall details the purpose of the meeting and provided Wall with a copy of the CFIB’s recent research report – A Foundation for Unleashing Entrepreneurship – The case for regulatory transparency and accountability in Saskatchewan, which had been presented to Minister Stewart at the February meeting.

“During our meeting with you and your staff, we discussed our members’ small business development priorities for the Saskatchewan government in the next five years. One of CFIB’s top recommendations for your government was to acknowledge the important role the small business community plays in Saskatchewan by making a commitment to reduce government regulatory burden on business,” Braun-Pollon said in her letter to Wall.

“CFIB was pleased to learn of a recent Ministerial Statement delivered by Minister Stewart where your government stated that the Enterprise Saskatchewan Interim Advisory Board agreed to oversee and monitor a major new initiative soon to be launched: “The Business Enabling Initiative.” It is our understanding this new initiative will “focus on ways to enhance the quality and ease of customer service to business, especially for smaller sized enterprises.” CFIB is pleased your government is taking a serious look at the regulatory environment in Saskatchewan and has committed to “minimizing excessive red tape and modernizing and streamlining our regulatory systems.” CFIB is most interested in key areas such as measures and targets for reducing regulatory burden on business, as well as reducing unnecessary red tape and paperwork.”

Braun-Pollon noted that “unlike taxes and spending, there is no institutionalized regulatory transparency and accountability.”

“CFIB believes the government of Saskatchewan has a huge opportunity to do what no other government has done: address the regulatory accountability deficit.

Saskatchewan could be the first province to pass legislation that would make it a world leader in regulatory accountability and ensure the initiatives by Enterprise Saskatchewan last well into the future,” Braun-Pollon said.

Braun-Pollon concludes her letter revealing what they’re after: “While reducing red tape has always been important for small business, existing and looming labour shortages guarantee the ongoing importance of saving time for both those in the public and private sectors. Passing a Regulatory Transparency and Accountability Act along the lines we are suggesting would prove to be a very effective tool to help address this challenge.

“We hope Saskatchewan will adopt CFIB’s plan to institute regulatory transparency and accountability and make some much needed reductions in red tape in order for its citizens to unleash their entrepreneurship and look forward to limitless opportunities for years to come.”

The ministerial statement Braun-Pollon alluded to was delivered by Minister Stewart in the Legislature on Apr. 2, 2008, and appears to speak to the issues that were discussed at the Feb. 11 meeting between the CFIB and the Saskatchewan Government.

Stewart told the Legislature that at its first meeting held on Mar. 31, 2008, the Enterprise Saskatchewan interim advisory board “agreed to accept my recommendation to oversee and monitor a major new initiative which will be soon launched. That is, Mr. Speaker, the business enabling initiative which will focus on ways to enhance the quality and ease of customer service to business, especially for smaller sized enterprises. Mr. Speaker, the initiative will also examine ways to minimize excessive red tape and modernize and streamline our regulatory systems.

“In the coming weeks, Mr. Speaker, a new advisory council will be created to work with Enterprise Saskatchewan board and staff to directly assist them as a focus sounding board to take up this challenge. We see the new business enabling initiative encompassing a number of specific outcomes.”

Stewart said “a few key areas and specific projects under this Enterprise Saskatchewan-led initiative will be measures and targets for reducing regulatory burden to business; facilitating and streamlining the process of registering a business; improving service delivery, including one-stop web services; reducing unnecessary red tape and paperwork, and modernizing our regulatory framework.”

In his May 8, 2008, response to Braun-Pollon, Premier Wall thanked her for her Apr. 7 letter and for enclosing a copy of the CFIB’s recent research report – A Foundation for Unleashing Entrepreneurship – The case for regulatory transparency and accountability in Saskatchewan.

“Your correspondence is timely as our Government has recently committed to minimizing excessive business red tape by modernizing and stream-lining our province’s regulatory system. Enterprise Saskatchewan will be the lead agency for this initiative, and they will certainly be seeking your organization’s input in both the initiative’s detailed planning and delivery activities,” Wall said.

The premier’s letter coupled with Stewart’s ministerial statement appears to reflect and deliver much of what the CFIB had been requesting. Further proof of this can be found not in Saskatchewan, but in British Columbia where the CFIB was attempting to get that government to adopt similar measures.

In an Apr. 8, 2008, letter to the BC Minister of Small Business and Revenue, Rick Thorpe, CFIB vice-president of Western Canada, Laura Jones, thanked the minister for meeting with them the previous month. Jones said she wanted to follow-up by providing the minister “with more information regarding CFIB’s suggestion that BC be the first province in Canada (and the only jurisdiction in the world) to pass Regulatory Transparency and Accountability legislation.” Sound familiar?

“We are optimistic that your government will follow through on our request to legislate regular measurement and reporting of the regulatory burden before the next election as your government has demonstrated a commitment to accountability in several other areas—most notably by passing legislation requiring balanced budgets and carbon emissions reductions,” Jones said.

Jones told the minister her organization was unable to find any other jurisdictions in Canada that had legislation requiring ongoing counts, but went to note that: “The Saskatchewan government has expressed serious interest in passing legislation along the lines we are suggesting in this letter.”

Jones closes her letter to with the same paragraph Braun-Pollon used in her letter to Premier Brad Wall: “While reducing red-tape has always been important for small business, existing and looming labour shortages guarantee the ongoing importance of saving time for both those in the public and private sectors. A Regulatory Transparency and Accountability Act along the lines that we are suggesting would prove to be a very effective tool to help address this challenge.”

Jones’s letter raises some interesting questions:

When did the Wall government tell the CFIB it was interested in passing regulatory transparency and accountability legislation?

How is that the CFIB, a business lobby group, could know six months ago that the province was interested in passing such legislation, but the Legislature and public were left in the dark?

It is interesting to note that when the Wall government introduced its anti-labour legislation, Bills 5 & 6 in Dec. 2007, it wasn’t long before concerns were raised that certain business groups might have been consulted prior to the legislation being tabled, a charge the government vehemently denies. Jones’s letter appears to suggest that, at least in this case, some form of consultation with the business community on a proposed piece of legislation may have occurred.

The CFIB’s research report: A Foundation for Unleashing Entrepreneurship – The case for regulatory transparency and accountability in Saskatchewan was released on Feb. 11, 2008, the same day Marilyn Braun-Pollon met with Premier Brad Wall, EI Minister Lyle Stewart and EI Deputy Minister Dale Botting.

The 10-page report was authored by Braun-Pollon and her Western Canadian colleague Laura Jones. It details why the CFIB believes Saskatchewan should pass a Regulatory Transparency and Accountability Act.

According to the report the CFIB view regulations as “a hidden tax” that most affects “small business owners who are on the front lines of compliance.”

“Incredibly, unlike taxes and spending, there is no institutionalized regulatory transparency and accountability. Several governments across Canada have followed British Columbia’s lead and taken some promising steps in this direction by finding ways to measure and report the regulatory burden. But none has committed to continue measuring and reporting by making it a legislated requirement,” the authors note.

“Reducing red-tape is, of course, a desirable goal. But without a long-term commitment to report regulatory measures, what is to stop regulatory creep from setting in once the short term target has been met? Without ongoing measurement, how do we know whether the burden is increasing or decreasing? How do we have any ongoing accountability?”

The CFIB make seven recommendations to get Saskatchewan to the regulatory Promised Land:

1) Pass a Regulatory Transparency and Accountability Act that requires the government to report measures of the regulatory burden by ministry in the Budget and Fiscal Plan documents, as well as at other regular intervals through out the year.

2) Measure the regulatory burden using the “regulatory requirement” model developed in British Columbia.

3) Determine a baseline count and set reduction targets to be achieved within a time period. CFIB recommends reducing by one-third in three years.

4) Implement a regulatory checklist for Ministers to sign off on for any new regulatory requirements introduced.

5) Institute a policy that for every new regulatory requirement introduced, two must be eliminated to achieve the red-tape reduction. Once the target has been met, institute a new policy where one requirement must be eliminated for every new requirement introduced to stop regulatory creep.

6) Regularly report progress at achieving the target, preferably by Ministry, to the public. In addition, publish regulatory counts by Ministry in the Budget and Fiscal Plan documents.

7) Commit to developing other measures, including measures of government customer service, to complement the “regulatory requirement” measure that can be reported regularly.

Braun-Pollon and Jones said that passing legislation “makes it more difficult for any future government to abandon the initiative and sends a positive signal to both the private and public sectors that this will remain a non-negotiable priority.”

The CFIB sees leadership from the Premier and Cabinet as “an essential ingredient for success. Achieving the stated reduction and transforming the way people think about regulation promises big rewards, but it does not happen overnight. Any change of this magnitude encounters resistance before being successful.

“CFIB views Enterprise Saskatchewan as playing a critical role in measuring and reporting on Saskatchewan’s tax and regulatory environment to ensure Saskatchewan’s economy remains competitive.”

With the creation of the benign and benevolent sounding Regulatory Modernization Council, which will report to the Enterprise Saskatchewan board, the Wall government has ensured that this will happen.

The CFIB report provides a hit list of areas where the business lobby group feels regulations are the most burdensome.

Citing a May 2005 survey on regulation Braun-Pollon and Jones state “The majority of small business owners in Saskatchewan believe that regulations around the PST, WCB and OH&S, and Labour Standards are the most burdensome provincial regulations in terms of paperwork, time, and money spent on compliance.”

The Wall government’s first year in office has set the table nicely for future action in some of these areas:

– Bills 5 & 6 – The Public Service Essential Services Act and The Trade Union Amendment Act, 2007 – were proclaimed on May 14, 2008.

– Fired long-time civil servant Allan Walker without cause on Jan. 24, 2008. Walker was the assistant deputy minister of occupational health and safety. In Mar. 2008, the Wall government appointed, without competition, Mike Carr as associate deputy minister, labour, employee and employer services. Carr is a Saskatchewan Party supporter and former co-chair of the Saskatchewan Chamber of Commerce’s human resources committee. Carr is also a former member of the Saskatchewan Labour Relations Board representing employers. Had Walker remained with the public service he would have reported to Carr.

– Fired Labour Relations Board chairman James Seibel and vice-chairs Angela Zborosky and Catherine Zuck without cause and appointed management lawyer and Saskatchewan Party supporter Ken Love as the new chair.

– Fired Workers’ Compensation Board chair John Solomon and installed Saskatchewan Party supporter David Eberle as the new chair.

– Appointed former CFIB director Dale Botting as new deputy minister of Enterprise and Innovation.

– Named EI Minister Lyle Stewart as chair of the Enterprise Saskatchewan board.

– Named long-time Saskatchewan Party supporter Gavin Semple as vice chair and the business sector representative of the Enterprise Saskatchewan Board of Directors.

– Named Marilyn Braun-Pollon and Saskatchewan Party supporter Shirley Ryan to the Regulatory Modernization Council, which will report to the Enterprise Saskatchewan board.

According to the backgrounder that accompanied the Sept. 17, 2008, government news release, the RMC is a ‘standing’ committee with an ability to establish ‘ad hoc’ committees, using external expertise, to address specific issues related to regulatory reform or business services. It will provide advice on ways to reduce paper burden, and modernize and streamline the regulatory system to decrease compliance costs and uncertainty for business, without compromising public health, safety and the environment. In addition, the Council will provide advice on opportunities to improve current government service delivery to business.

Possible examples of RMC activities might include:

– advising on a consultative regulatory registry for new and amended regulations;

– identifying potential opportunities to utilize alternative regulatory tools like performance-based regulations, self-regulatory frameworks, adopting standards and codes of practice, voluntary compliance, etc.;

– identifying opportunities to harmonize regulations and standards with other provinces and trading partners; and

– assessing opportunities to better co-ordinate Saskatchewan’s regulatory reform and business service activities with federal government initiatives.

The RMC “will be expected to develop a strategic direction which will guide the government’s current and future activities related to business regulation and services.”

The Council will also “be expected to reflect the interests of the business community for enhanced regulatory and business services.”

“During the course of their activities, the RMC will develop an expertise in the areas of business regulatory reform and service delivery. As a result, the Council members and the assigned ES staff will emerge as provincial experts and spokespeople on those topics,” the backgrounder states.

So it would appear that Council members (i.e. the business lobby) will be speaking on behalf of the government.

From an earlier assessment of regulatory review activities in other jurisdictions by the Enterprise Saskatchewan board, 11 strategic themes for regulatory modernization have been identified. From this analysis, a background paper was prepared and examined the issues, status and best practices for minimizing the negative regulatory implications associated with each theme. The aim of that discussion paper is to assist the RMC in its discussions regarding regulatory modernization in the province.

The 11 strategic themes which have been identified include:

– Client Service Focus
– On-Line Service Expansion
– Paperwork Streamlining
– Measurement and Accountability
– Timeliness
– Transparency
– Effective Communication
– Regulatory Impact Analysis
– Harmonization of Standards (e.g. TILMA)
– Modern Regulatory and Compliance Alternatives
– Reducing the Financial Burden on Business

The discussion paper in question is called Strategic Themes for Regulatory Modernization: Draft for Discussion Purposes (June 2008) and was prepared by the Competitiveness and Strategy Division of Enterprise Saskatchewan.

The 50-page document seems to have been prepared after the CFIB’s Marilyn Braun-Pollon met with government officials in Feb. 2008 and incorporates at least a couple of the lobby group’s recommendations. These include:

– Increase the profile of regulatory reformation activities through regular reporting in the budget and throne speeches.

– In order to avoid unnecessary internal red tape and delays for routine, low-impact regulations, develop a checklist signed by the Minister, similar to that used by British Columbia, with negative responses requiring written justification.

A disturbing aspect of the discussion paper is that the Competitiveness and Strategy Division staff makes liberal use of CFIB survey results and reports to help justify its findings. The CFIB is first and foremost a lobby group. Its research and reports are for the most part self-serving. The concern is magnified more so because of the organization’s involvement in the process and its apparent closeness to the Wall government.

One of most laughable passages in the discussion paper is contained in the section on transparency. Page 20 states:

“Transparency is a recognized principle of good governance and serves to protect stakeholder interests. In the context of developing regulations, transparency guards against “regulatory capture”, whereby special interest groups or powerful players in the market are able to influence regulatory decisions in their favour, to the detriment of society as a whole. Proponents on both sides of the ideological divide have called for greater public participation in the regulatory process to increase the transparency, accountability and legitimacy of the process. Transparency of regulations fosters public confidence and encourages increased participation and investment by maintaining a level playing field. Enhancing regulatory transparency contributes to the effectiveness of regulations, ensures that regulations accomplish their objectives in the least obtrusive way possible, and increases the likelihood of compliance.

“Several important regulatory issues have surfaced in recent years that caught Saskatchewan business interests off guard (e.g. Available hours regulations) and provoked strong reaction in the media. Business organizations frequently call for greater transparency so that businesses can be aware and comment on decisions that will affect them and be given adequate time to make necessary changes. Stakeholders have requested that governments share the assessments that are part of the decision-making process to provide a better understanding of why specific decisions are made in light of their interests and to ensure that their voices have been heard and considered.”

The Enterprise Saskatchewan board of director meetings and the development of the RMC have been conducted behind closed doors. There is no “public participation in the regulatory process” taking place. The time that elapsed between Braun-Pollon’s first meeting with Dale Botting on Dec. 11, 2007, and the announcement on Sept. 17, 2008, that the RMC had been created is 9 months and 6 days. Aside from a well crafted ministerial statement in the Legislature on Apr. 2, 2008, where was the public involvement in the process?

With respect to “regulatory capture” one could argue that the government’s regulatory reform process has already been fatally comprised by the deep involvement of a special interest group: the Canadian Federation of Independent Business.

On the matter of regulatory issues catching Saskatchewan business interests off guard the discussion paper is silent on the anti-labour legislation that was introduced by the Wall government in Dec. 2007 without any prior consultation or input from organized labour. No “assessments” were shared beforehand and the voice of labour was not permitted to be “heard and considered.” It was relegated to commenting on something the government had no intention of changing.

A Dec. 17, 2007, draft labour legislation communications action plan that was obtained from the Ministry of Advanced, Education and Employment under The Freedom of Information and Protection of Privacy Act notes that “After the legislation is introduced, we will invite feedback from a broad range of groups, but we are firm on the key points of this legislation.”

The Competitiveness and Strategy Division’s discussion paper is just that – a discussion paper. The final sentence in the document states “Additional issues will likely be brought forward where changes to policies, procedures or regulations may be required.”

Will one of those issues be the introduction of a Regulatory Transparency and Accountability Act?

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