At the beginning of July, Shafqat Ali, president of Canada’s Treasury Board, announced the launch of a “red tape review” of regulations across federal departments and agencies with regulatory responsibilities, with a reporting deadline of the beginning of September in advance of the federal budget.

According to the news release, “ministers will review regulations in their portfolios and propose actions and measures to eliminate red tape –– including removing outdated regulation.” 

The press release contained a reference to the role of regulations in protecting Canadians’ health and safety. But if history is any guide, when they clash with corporate interests—given the corporate capture of regulations—the public interest will be compromised or subordinated to corporate profit. 

I document this long-standing pattern in my book Corporate Rules: The Real World of Business Regulation in Canada. Regulatory capture has typically resulted in reduced oversight and enforcement resources, weak or nonexistent accountability and liability regimes, a veil of secrecy between regulators and regulated industries, the lack of rigorous conflict of interest rules and effective whistleblower protections.

At the same time as the Treasury Board red tape announcement, Finance Minister François-Philippe Champagne directed his cabinet colleagues to find ways to cut program spending by billions of dollars in preparation for his first budget in the fall. Reducing red tape is invariably accompanied by fiscal austerity, including cuts to regulatory agencies. 

The red tape regulatory review is also consistent with the Carney government’s “One Canadian Economy Act,” (Bill C-5) which allows it to prioritize and fast track projects, including scrapping regulations which it views as red tape. A list of priority projects is due to be made public soon.

Red tape reduction’s sordid history

We’ve seen this movie before. Government efforts to root out so-called red tape regulations have a long history. This deregulation trajectory has often compromised public safety—at times with catastrophic consequences. 

For decades, federal governments have systematically weakened or eliminated regulations, replacing them with industry self-regulation, with limited or no direct public oversight.

In 1985, Brian Mulroney created a task force led by Deputy Prime Minister Erik Nielsen, to root out red tape regulations which it claimed were a hidden cost and a burden to business.

Prescriptive regulatory models which separated public and private interest, underwent a profound shift. Under the Mulroney, government the new modus operandi became one of partnership, mutual interests, guidance documents, voluntary measures—the merging of public and private interests. Under this regulatory model, the government delegated the responsibility for key functions such as safety oversight to the private sector.

This was followed by the Chretien Liberal government’s “smart regulation” initiative that claimed to reduce red tape without compromising public health and safety.

Safety oversight regimes called Safety Management Systems were introduced in 2002, that allowed the regulator to outsource responsibility for operationalizing and implementing regulations to industry. providing government cover from its responsibility in the event of failures.

The Harper government implemented its signature red tape reduction measure in 2012: the Cabinet Directive on Regulatory Management. Its centrepiece was the “one-for-one rule,” which mandated that regulatory agencies offset each proposed new or amended regulation by removing at least one existing regulation. It progressively lowered the ceiling on the number of regulations without regard to whether those removed would compromise safety. 

The Trudeau government changed the name of the Harper initiative to the Cabinet Directive on Regulation, but left it largely unchanged. It also introduced a recurring annual regulatory modernization bill allowing businesses to review and vet regulations in order to reduce red tape.

Consequences

Only after a major disaster does the public become aware of the deep flaws in regulatory regimes and lose confidence in government’s ability to protect them.  Major disasters in Canada include the Ocean Ranger, the Westray Mine,  the Walkerton water contamination,  the 2008 listeria outbreak, to name a few. 

Then there is Lac–Mégantic oil train disaster—whose story I have told in my book The Lac-Mégantic Rail Disaster: Public Betrayal, Justice Denied,

It was the worst calamity on Canadian soil in over a century. The small town in south eastern Quebec was destroyed. The editor of the local newspaper wrote, “The sky is on fire, a chain of explosions and the sound of whistling gas escaping from everywhere, the vomiting bowels of hell. The scene was like the end of the world.”

That night, 47 people died, their hopes and dreams obliterated, futures wiped out. Twenty-seven children lost their parents. Families lost their sons, daughters, mothers, fathers, brothers, sisters, cousins, aunts, uncles. Others lost their friends, lovers, fellow workers, classmates, teammates. 

Their deaths were collateral damage from the culmination of mutually reinforcing policies of cutting red tape—which subordinated government’s obligation to protect the public—aligned that terrible night. It was a perfect storm of regulatory failure and corporate negligence.

Going forward.

How will the findings of the current red tape review, the announced program cuts, Bill C-5, and the upcoming budget affect the federal regulatory regime? Will the government prioritize public health and safety regulations, or will they continue to be subordinated to corporate interests when they conflict? Will the corporate-government power relationship status quo prevail, or will the federal government introduce new measures to address the corporate capture of regulations to make regulations more capture resistant and prioritize the public interest?

Twelve years after the Lac-Mégantic rail disaster the necessary safety regulations have not been put in place to minimize risk going forward. I describe the ongoing safety issues in the years following. A 2020 report on the transportation of dangerous goods by the Environmental Commissioner in the Auditor General’s Office warned: “The window for a recurrence of a Lac-Mégantic-type disaster is still open.” 

What about regulations to address the climate crisis that is already upon the planet? Thus far Canada has been a laggard in meeting its greenhouse gas emissions reduction targets.

While odds of transcending the power status quo are formidable, actions by government insiders, labour groups, citizens advocates, can exert the necessary pressure to ensure that red tape reduction measures do not compromise public health and safety.