Targeted Regulatory Review: Digitalization and Technology-Neutral Regulations Roadmap

Introduction

The Digitalization and Technology-Neutral Regulations Roadmap (Roadmap) is the plan developed by participating federal departments and agencies to support regulatory modernization through digitalization. It is one of three Roadmaps that are part of Round 2 of the Targeted Regulatory Reviews; the other two are the International Standards Regulatory Roadmap and the Clean Technology Regulatory Roadmap. The three Regulatory Review themes were recommended by the External Advisory Committee on Regulatory Competitiveness.

Led by Environment and Climate Change Canada (ECCC) and Innovation, Science and Economic Development Canada (ISED), this Roadmap outlines a suite of actions to advance digitalization in the regulatory space and support regulations that avoid prescribing any particular technology that must be used to comply with regulatory measures. It also identifies opportunities to simplify the regulatory process to reduce administrative burden and to ensure that regulations do not impede the use of new technologies.

1. Context on the Digitalization and Technology-Neutral Regulations Review

1.1 Overview

Digital technology is changing our economy and our society—the way we access information, work, and connect with each other.

Canada needs to keep pace with rapidly changing industry needs and digital services. Canada's digital capacity underpins its ability to deliver on every single service and policy initiative it develops. The transformative potential of digital tools offers significant opportunities to modernize and simplify regulatory interactions for the benefit of all Canadians. Moreover, technological advances, along with improvements in consumer-oriented digital interfaces, have raised expectations regarding excellence in digital service delivery.

The COVID-19 pandemic has also accelerated the need for digitalization and led businesses to rethink their approaches and to look at more digital tools. In its early stages, the pandemic created an immediate need for businesses to move their transactions online and to rapidly develop digital solutions, as well as for the federal government to support Canadian businesses and spur economic recovery. This has led businesses and governments alike to expand their efforts to digitalize their processes and modify their practices.

The pandemic has highlighted how important digital tools are for keeping Canadians connected, governments operating, and businesses afloat. More than ever, Canadians and businesses expect government services to be fast, online, easy to use, inclusive, reliable, and secure. In supporting the response to the pandemic, the Government of Canada rapidly advanced digital transformation. It found ways to bring existing services online, developed and implemented entirely new programs in record time, and supported federal public servants as they adapted to remote work. The opportunity is ripe to accelerate digital transformation and support more effective regulatory administration. Leveraging the opportunities of the digital and data-driven economy can help to support Canada's economic recovery and enable more Canadians to participate in a digitally connected future.

Digitalization can also enable more efficient, effective and responsive management of Canada's regulatory system, recognizing that these processes form a critical part of our service offerings to Canadians and Canadian businesses. In turn, this can help to reduce costs and administrative burden for both businesses and regulators and support competitiveness. Facilitating the development, adoption, and support of digital tools in the creation and management of regulations can simplify many regulatory processes in the digital and data-driven economy.

Benefits for businesses include simplifying and streamlining reporting requirements, enabling the use of digital tools such as e-signatures, and supporting more effective regulatory compliance. Advancing digital tools in the regulatory space can also lessen the operational and delivery burden on regulators to enable more effective, efficient and responsive regulatory management. The ways that these tools can help include automating and digitalizing compliance options, enabling risk-based regulatory management, and improving the efficiency of resource allocation.

Stakeholders have highlighted the importance of having technology-neutral regulations, which are silent on the particular technology that must be used to comply with regulatory measures. Technology-neutral regulations bring flexibility to businesses by providing them with longer periods of regulatory certainty as well as the freedom to adopt the technology they deem best to achieve required regulatory outcomes. They can also provide potential efficiency gains, as industries are incentivized to find innovative ways to comply with the regulatory requirements without compromising health, safety, security, or environmental protections. Finally, technology-neutral regulations make it easier for businesses to adopt new technologies in the future.

The Targeted Regulatory Review on Digitalization and Technology-Neutral Regulations provides an opportunity to advance the use of digitalization in the regulatory space and the adoption of more technology-neutral regulations. The resulting Roadmap focuses on how regulators can improve regulatory management effectiveness and efficiency for stakeholders as a whole, across all sectors.

The Roadmap outlines specific commitments from federal departments and agencies to digitalize aspects of their regulatory processes, develop technology-neutral regulations and create regulatory environments that foster innovation. These commitments respond to issues raised during public consultations, support Canada's economic recovery, and seek to foster Canada's long-term economic growth. Some federal regulators are also proposing proactive initiatives that would, for example, allow businesses to pilot innovative products in controlled regulatory environments. These initiatives are an important step in ensuring regulations and their administration become institutional enablers of digital government transformation. They demonstrate the Government of Canada's commitment to leveraging opportunities associated with digital technologies, providing efficient user-centric services to Canadians, and facilitating firm competitiveness.

This Roadmap focuses on initiatives to digitalize regulatory practices and remove technology- specific requirements in regulations. However, it does not examine regulatory requirements faced by firms in specific digital industries, such as e-commerce, cybersecurity, or financial services/financial technology. That is, the Roadmap focuses on how regulators can improve regulatory management effectiveness and efficiency for industry, rather than on what standards or rules should govern a specific industry.

1.2 Regulatory framework

The issue of digitalization has government-wide relevance and is not captured under a single federal regulatory framework. This means that the opportunity to enhance digitalization applies not only to multiple industry sectors, but also to various government departments and agencies. The Roadmap responds to stakeholder issues across a broad range of sectors and policy areas.

Despite the lack of a single regulatory framework in this area, there are a number of broader Government of Canada initiatives that aim to deliver a more open and collaborative digital government, providing improved digital-first, user-centred services and programs. The Government of Canada is also taking steps to modernize its regulatory frameworks as a means of streamlining processes, spurring innovation, and unlocking growth and investment.

The Government of Canada is committed to transform its digital service offerings and has appointed a Minister of Digital Government. This Minister's mandate is to lead work to transition to a digital government in order to improve citizen service; this has resulted in a number of initiatives that respond to the growing need for more agile, open, and user-centred digital services.

In 2021, the Treasury Board Secretariat (TBS) released its Digital Operations Strategic Plan 2021-2024. This plan sets out the strategic direction for the Government of Canada on digital transformation, service delivery, security, information management (IM) and information technology (IT). Specifically that "Good government in the 21st century means seamlessly delivering programs and services that, by design, are digitally enabled, client‑driven, inclusive and accessible, and that address security and privacy concerns. The Government of Canada needs to accelerate its digital transformation to meet changing public expectations, optimize value, and become nimbler so that it can adapt faster.".

In fall 2018, the Government of Canada published the Digital Standards. Co-created with the public and key stakeholder groups, these Standards are meant to support the work of federal departments and agencies in becoming more agile, open, and user-focused in designing and delivering digital services. This was followed by the release in 2019 of the Treasury Board Secretariat Policy on Service and Digital, which introduced an integrated set of rules for how Government of Canada organizations should manage service delivery, information, data, IT, and cybersecurity in the digital era. This policy took effect on April 1, 2020. The primary objective of this policy is to improve client service experience and government operations, including regulatory administration, through digital transformation approaches.

The Government of Canada also implemented the Canadian Digital Service (CDS) in 2017. The mission of the CDS is to collaborate with federal departments and agencies to put citizens' needs at the centre of government services. Several partnerships between the CDS and federal departments are already underway to design, test, and build simple, easy-to-use services for Canadians.

In 2018, the Privy Council Office released a Data Strategy Roadmap for the Federal Public Service. This strategy positions the Canadian Public Service to provide the best possible advice to ministers and support the strategic use of data while protecting the privacy of Canadians, consistent with regulations on privacy protection. Many departments and agencies have already developed their own departmental data strategies and have begun work to implement them.

Underpinning Canada's transition to the digital economy is Canada's Digital Charter. Launched by ISED in May 2019, the Charter outlines guiding principles to enhance the control individuals have over their personal data, protect privacy, and ensure that Canadian companies can develop world-leading innovations that fully embrace the benefits of the digital economy. The Charter was built on detailed cross-country consultations and launched alongside other initiatives that provide support to the Government's digital transformation, digital industries, and the data-driven economy. Associated initiatives include the Government's commitment to modernize Canada's Privacy Act and its introduction on November 17, 2020 of the proposed Digital Charter Implementation Act, 2020, which seeks to modernize the framework protecting personal information collected by the private sector.

Many federal departments and agencies have also been implementing digitalization initiatives, in line with broader federal commitments to support businesses as they move to adopt more digital solutions. These initiatives include the implementation of new digital tools and solutions to help improve service delivery for Canadians and businesses and to reduce the administrative burden related to complying with regulatory requirements. In addition, federal regulators have been modernizing their regulations to keep pace with rapid changes in technology and to support innovation. Further details are in the Roadmap section titled "Regulatory modernization activities".

1.3 Government organizations involved

The following federal departments and agencies participated in this Regulatory Review. They participated in different ways, from submitting and supporting proposals, to guiding and supporting the development and implementation of the Digitalization and Technology-Neutral Regulations Roadmap.

Canada Border Services Agency
Canada Revenue Agency
Canadian Food Inspection Agency
Employment and Social Development Canada
- Labour Program
Environment and Climate Change Canada
Health Canada
Immigration, Refugees and Citizenship Canada
Innovation, Science and Economic Development
- Measurement Canada
- Office of the Superintendent of Bankruptcy
Natural Resources Canada
Transport Canada
Treasury Board of Canada Secretariat

While all of the departments and agencies listed above have participated in this Regulatory Review, not all have proposed initiatives for this Roadmap. Specific leads for the initiatives proposed in the Roadmap are identified in the section titled "Digitalization and Technology Neutral Regulations Roadmap initiatives".

2.0 Consultations

The Digitalization and Technology-Neutral Regulations Review consultation process included a broad range of industry stakeholders. These included representatives from small and medium-sized businesses, multinational companies, and industry associations. Input was received across several industry sectors, including manufacturing, distributing, retail, export, oil and gas, transportation, and clean technology. Stakeholders also included non-governmental organizations and academics.

At the outset, approximately 500 participants, representing a range of industry associations, companies, and other entities, participated in a series of seven webinars held in the month of August 2019. In addition, Treasury Board Secretariat published a Canada Gazette notice on June 29, 2019, which officially closed on September 5, 2019. The Canada Gazette consultations resulted in 93 written responses related to the Regulatory Reviews, over 40% of which related to the Digitalization and Technology-Neutral Regulations Review. A summary of the issues is included in the What We Heard Report. Implicated departments and agencies also considered stakeholder input from earlier consultations and proactive proposals to inform the summary of stakeholder issues and irritants.

As part of engagement activities, interdepartmental meetings offered various departments and agencies the opportunity to provide input on the Regulatory Review. These efforts began in the fall of 2019 following the Canada Gazette, Part I request for stakeholder comments on regulatory modernization initiatives. In support of the development of this Roadmap, a number of meetings were held during winter and early spring 2020 between stakeholders and federal representatives interested in discussing the Regulatory Review.

The recommendations of the Economic Strategy Tables (ESTs) and the Industry Strategy Council (ISC) also informed the Regulatory Reviews. Budget 2017 announced the ESTs as an industry–government collaboration focused on turning Canadian economic strengths into global advantages. Detailed Final Reports released in September 2018 set ambitious growth targets and provided recommendations to achieve those goals.

In May 2020, the ISC was established to share perspectives on the recovery of Canada's key economic sectors and to assess the impact of the COVID-19 pandemic on the economy. In December 2020, the ISC released a report emphasizing that the pandemic has accelerated a digital transformation that was already underway. The ISC noted there is a need to invest now to build world-leading companies and to inspire traditional sectors to digitally transform. The ISC's report emphasized the need to ensure strategic investment in digital and physical infrastructure, agile regulations, and strategic use of procurement to support innovation.

In response to COVID-19 and its economic impacts, the Government of Canada undertook a number of actions to address changes in the market, ranging from liquidity supports to regulatory flexibilities. In early spring 2020, federal departments and agencies consulted further with businesses and other stakeholders to better understand their latest challenges to respond to the pandemic. Those consultations spanned a range of topics, emphasizing the need for a horizontal approach to digitalization.

Many consultation topics fell within the scope of this Regulatory Review. However, some of the issues that stakeholders raised are not addressed in this Roadmap, such as those that are outside its scope, have been raised or addressed through other engagement exercises, or would require significant additional analysis and consultations. A summary of the issues not being addressed through the Digitalization and Technology-Neutral Regulations Roadmap is available in the section titled "Issues not being addressed".

3.0 Regulatory modernization activities

The Government of Canada is currently advancing a number of regulatory modernization initiatives that encourage digitalization and the development of technology-neutral regulations. These include both horizontal regulatory modernization initiatives and specific initiatives being advanced by individual federal departments and agencies.

At a government-wide level, the Cabinet Directive on Regulation encourages departments and agencies to design outcome- or performance-based regulations when assessing the effectiveness and appropriateness of regulatory instruments for achieving policy objectives. Outcome-, or performance-based, regulations specify the desired result that a regulation intends to achieve, rather than prescribing compliance. In the case of digitalization, advancing technology-neutral regulations will allow businesses and citizens the freedom to adopt the technology appropriate for them and spur demand for new and innovative products and services. By not specifying the type of technology to use, these regulations will remove impediments to the use of new or emerging technologies.

Another key government-wide digitalization initiative is the Online Regulatory Consultation System (ORCS). This is being developed by Treasury Board Secretariat (TBS) and Public Services and Procurement Canada to increase the transparency of Canada's regulatory process and to fulfil an obligation of the Good Regulatory Practices Chapter of the Canada-United States-Mexico Agreement. ORCS will increase transparency in the development of regulations by posting online the comments received from regulatory consultations published in Canada Gazette, Part I. The launch of ORCS will include the development of new training, policies and guidelines for regulators and stakeholders.

TBS also continues to work with departments and agencies across the Government of Canada in respect of digital identity and electronic signatures. This includes work to continue to evolve the legislative, regulatory, and policy frameworks for all of government to ensure a consistent and secure approach to the acceptance of digital identities, electronic documents, and signatures.

This suite of measures is expected to meaningfully improve the interactions Canadians have with the Government of Canada, resulting in more modern, simple, and efficient services centred on users. These initiatives are geared towards digital service delivery. They also advance digitalization in the regulatory sphere by providing opportunities to simplify processes and reduce administrative burden.

In digitalizing government services, the Government of Canada recognizes that not all users are digitally enabled and remains committed to maintaining options to interact with Canadians in other ways. The objective is to ensure that Canadians, businesses, and other regulated parties can continue to interact with the Government of Canada through their preferred channel while allowing for the development and implementation of new and easier-to-use service delivery methods.

Below are examples of efforts made by federal departments and agencies to deliver on these shared objectives.

Canada Border Services Agency

The Canada Border Services Agency (CBSA) is responsible for collecting applicable duties and taxes on imported goods and plays a critical role in protecting the health and safety of Canadians by screening the movement of goods and people across Canada's borders. Pre-pandemic, Canada and much of the world were experiencing a rapidly changing border environment, marked by a significant increase in travelers and goods crossing the border, and a surge in e-commerce. COVID-19 exacerbated some pre-existing challenges and introduced new ones.

While the growing volume of trade provides many benefits to the Canadian economy, accounting for imported goods and assessing the applicable duties and taxes involves extensive and cumbersome administration by both importers and the Government. Currently, outdated paper-based processes and limited technological capabilities impede the CBSA's ability to efficiently assess and collect duties and taxes, and may place Canadian businesses at a disadvantage compared to their foreign counterparts that have electronically enabled border services. For example, given the COVID-19 pandemic, a "contactless" digital border would assist Canadian businesses in accounting for imported goods, making payments, communicating with the Government of Canada, and furnishing financial security.

As part of the Targeted Regulatory Review process, the CBSA is examining its existing regulatory practices to identify those that can be improved. CBSA is engaged with many different groups and networks of internal and external stakeholders as part of its engagement on the CBSA Assessment and Revenue Management project (CARM).

CARM is an initiative that simplifies the processes associated with the assessment and collection of duties and taxes for commercial clients. An update on CARM was included in CBSA's 2020-2021 Departmental Plan update on Transformational and Major Crown Projects. As part of its 2020-2022 Regulatory Stock Review Plan, the CBSA intends to conduct a review of certain trade facilitation regulations in 2022 to ensure that the regulations continue to support and align with CBSA's trade facilitation goals. In 2022, the CBSA will complete the "Trade Facilitation and Compliance" program evaluation and will conduct an assessment of the CARM project. This review will focus on ensuring that issues identified in the program evaluations are assessed and appropriate remedies are implemented.

Canada Revenue Agency

In recent years, the Canada Revenue Agency (CRA) has taken steps to facilitate compliance for businesses and to improve services offered to Canadians. The CRA has been consulting regularly with small and medium-sized businesses and their representatives to make its programs and services more streamlined, modern, and client-focused. In 2012, the CRA consulted with small businesses on cutting red tape. In 2016, the CRA followed up with its first round of the Serving You Better (SYB) consultations with small and medium-sized businesses and accountants. SYB Round 2 followed in 2018 to gather feedback on the service improvements made to date.

The majority of the CRA-related feedback received during the consultation period of Round 2 of the Targeted Regulatory Reviews echoed the concerns raised during SYB consultations. Comments focused mostly on modernizing services and making information easy to find and understand. The CRA has already launched specific initiatives to address these needs. Additional information related to these initiatives can be found in the reports on CRA's SYB consultations.

Canadian Food Inspection Agency

During the first round of the Targeted Regulatory Reviews, the Canadian Food Inspection Agency (CFIA) committed to various initiatives that advance the digitalization of service delivery and the development of technology-neutral regulations through the Agri-food and Aquaculture Roadmap. The emergence of the COVID-19 pandemic has reaffirmed the importance of swiftly implementing these CFIA Roadmap commitments, as many provide stakeholders and CFIA with improved flexibility to innovate and leverage digital tools in support of economic recovery. Accordingly, CFIA is introducing additional proposals through this second round of Regulatory Reviews to make further progress towards these ends.

Since the Agri-food and Aquaculture Roadmap was introduced in June 2019, CFIA has made progress on a number of initiatives, including digitalization processes for permissions, export certification and inspections through the Digital Service Delivery Platform (DSDP). Progress also includes piloting the use of blockchain and bringing into force new or amended regulations in an effort to keep pace with modern tools and advancements.

DSDP is a CFIA platform designed to manage and track service requests, licenses, permissions, and inspections in a consistent manner for a given regulated party in a single system. Known as MyCFIA, this platform allows regulated parties to request services, export certificates, permissions, and licenses and also view a history of previously requested services, including inspections and inspection reports. CFIA is taking a phased approach to incorporating programs and functions into DSDP. Overall, this work continues to reduce administrative burden associated with paper-based processes and support public health guidelines concerning social distancing by limiting physical interactions at CFIA locations.

CFIA intends to continue working with individual firms and industry associations at the outset to formulate their individual blockchain plans and actively monitor subsequent developments. Specifically, CFIA is pursuing multiple areas of opportunity. These include collaborative exploration with the Standards Council of Canada on blockchain standards for the broader agriculture sector, data governance to support interoperability, international trade facilitation, and supply chain traceability. Given the experiment's promising results thus far, CFIA anticipates continued attention in this sector.

With the introduction of the Safe Food for Canadians Regulations in 2019, outcome-based regulations now form a key part of CFIA's modernization plan. CFIA will continue to modernize a suite of CFIA-administrated regulations over the next two years to support the adoption of technology-neutral regulatory requirements (see CFIA's Forward Regulatory Plan).

Employment and Social Development Canada

As a result of the COVID-19 pandemic, Employment and Social Development Canada (ESDC) has a number of initiatives underway that address some of the concerns raised by stakeholders on the topic of digitalization, while maintaining the organization's critical focus on ensuring continuity and stability in the delivery of benefits and services to Canadians. In response to the COVID-19 pandemic, ESDC mobilized its resources to develop and deliver the program parameters, business processes, communications, and tools for the new Canadian Emergency Response Benefit in a matter of weeks.

Canadians expect convenience in their service experience with government and easy access to digital services. Through investments in business process re-engineering, technology suite renewal, and parallel policy simplification, the Benefits Delivery Modernization (BDM) program will be a key enabler in streamlining access for Canadians to the benefit programs delivered by Service Canada and in improving ESDC's ability to meet established service standards. As ESDC sets the foundation for a strategic and coordinated long-term modernization of benefits delivery, short and medium-term initiatives were undertaken and will continue in the immediate future to deliver real results and value for Canadians. The BDM program of work will improve client service and internal efficiencies in the short-term and will provide the opportunity to build on incremental progress, while at the same time designing the future of service delivery.

Over the last two years, ESDC has improved the web content for many of its programs including Employment Insurance, Canada Pension Plan, and Old Age Security. As part of this work, ESDC is using digital readability tools to simplify language used on government web pages to make it more accessible and easier to understand. As Principal Publisher for Canada.ca, ESDC is also working towards improved search tool functionality so that information on Canada.ca is easier to find. ESDC continues to explore ways to increase the rank of Canada.ca through external search engines and voice assistant devices to make it easier for Canadians to access.

Environment and Climate Change Canada

Environment and Climate Change Canada (ECCC) is one of the federal government's most active regulators. It has full or shared responsibility for Acts and regulations that cover a wide range of issues, including toxic chemicals, air pollution, greenhouse gas (GHG) emissions, wastewater, environmental emergencies, migratory birds, and species at risk, and affects a broad set of industries and businesses.

ECCC's default approach to the design of regulations is to use market-based or performance- based regulations. These technology-neutral approaches provide flexibility for businesses to find the least-cost method of achieving the required environmental outcomes; this in turn creates incentives for businesses to adopt such lower cost methods to meet these outcomes.

ECCC is strongly committed to modernizing its digital tools and services to better serve Canadians. In response to the COVID-19 pandemic, it has sped up its modernization work while also moving towards an ECCC-wide information management/information technology solution. Recent modernization work has included building secure online systems to allow businesses to submit information to ECCC. In particular, ECCC has built the Output Based Pricing System Registration and Reporting modules in ECCC's Single Window System, which have reduced the administrative burden on businesses required to register their facilities and report on GHG emissions and have allowed 210 registered facilities to complete their reporting online for the 2019 compliance year; a system for automobile manufacturers to submit annual reports on vehicle emissions; and a system to handle documents related to the cross-border shipment of hazardous waste and hazardous recyclable material, which eliminated the tracking of 160,000 paper copies of documents in 2019-2020.

Health Canada

Health Canada (HC) is committed to advancing regulatory and policy modernization initiatives outlined in the Health and Biosciences and Agri-food and Aquaculture Regulatory Review Roadmaps produced following the first round of Targeted Regulatory Reviews. At the same time, HC continues to review and develop health regulations that support technology neutrality, the use of digital tools, the improvement of data management, and the identification of novel digital approaches that reinforce digitalization. The COVID-19 pandemic has amplified Canadians' demand for telemedicine and online health services, which is transforming the delivery of healthcare across the country.

To this end, HC is exploring ways to expand the reach of Digital Labels. A Digital Label is a label that incorporates technology to extend the functionality and contents of labels or packaging beyond traditional print methods. This type of label allows consumers to access labelling information through devices, like a smartphone. HC is looking to adapt labelling requirements to account for digital products where it is not possible to affix a physical label, and to allow for the publication of additional information on manufacturers' websites.

To better understand and leverage the increasing volume and variety of health, regulatory, and scientific data, HC has developed an ambitious data strategy. The goal of the strategy is to improve collaboration with partners and regulated parties for the collection, sharing and reuse of data by managing it as an asset. In addition, HC is making strategic investments to replace aging information technology systems and paper-based processes for regulatory programs to address stakeholder concerns regarding prescriptive requirements in certain HC regulations.

Immigration, Refugees and Citizenship Canada

In 2017, Immigration, Refugees and Citizenship Canada (IRCC) brought into force a series of new provisions and amendments to the Immigration and Refugee Protection Act that set out clear authorities to use electronic tools and systems across all immigration lines of business. Supporting regulations were introduced in June 2019 to give further clarity and establish requirements regarding the use of electronic tools. These changes were introduced to support the expanding use of electronic tools in the immigration system and to provide a strong foundation for IRCC's ongoing modernization efforts.

Travel and service disruptions resulting from the COVID-19 pandemic have only magnified the need for Canada to move toward a digital processing and service delivery model. The proposals in this Digitalization and Technology-Neutral Regulations Roadmap will allow IRCC to continue to develop tools and approaches to effectively deliver immigration programs with more limited in-person interactions and fewer paper-based applications. As immigration continues to support Canada's economic growth, a push toward digital services will help students and workers already in Canada transition to new occupations and will help IRCC safely bring in new immigrants to support Canada's long-term recovery.

These changes will help align IRCC's legal and policy framework with the work under way to modernize its information technology platform, complementing the investments announced through the 2020 Fall Economic Statement.

Innovation, Science and Economic Development Canada

In recent years, Innovation, Science and Economic Development Canada (ISED) and its portfolio organizations took steps to digitalize key regulatory functions and to reduce the barriers to digital service delivery. The COVID-19 pandemic accelerated the need for such changes and required significant coordination to respond quickly to stakeholders' new realities. ISED and its portfolio organizations demonstrated flexibility in developing, applying, and enforcing regulations during this exceptional period, and remain committed through this Roadmap to further digitalize and streamline its regulatory processes.

Additionally, ISED reviewed its regulatory frameworks to provide better digital services to business. A recent Corporations Canada success is the official launch in June 2020 of the Multi-Jurisdictional Registry Access Service (MRAS), a digital solution that reduces red tape and internal trade barriers by connecting business registries across the country. MRAS is the result of a pan-Canadian collaboration led by the Government of Canada to make it easier for companies to register and do business with government and to increase corporate transparency. In June 2020, British Columbia, Alberta, Saskatchewan, and Manitoba became the first jurisdictions to adopt the MRAS digital solution to connect their business registries and exchange information. This success is part of ISED's progress on implementing the Tell-Us-Once and OneGC approaches, in line with the new TBS Policy on Service and Digital, and ISED's participation in government-wide digital identity initiatives.

ISED also undertook several digitalization efforts to clarify regulatory processes frequently misunderstood by businesses. For example, ISED launched a telecommunications spectrum developmental licence program to allow wireless innovators to test the capabilities of their new products alongside a Developmental Licence Playbook. The "Playbook" guidance model, which describes a process tied to legislative objectives, has been instrumental in helping businesses navigate the new licence program and aims to facilitate innovators' understanding of expected compliance requirements and their application.

Natural Resources Canada

Digital innovation within the mandate of Natural Resources Canada (NRCan) refers to driving clean, sustainable growth within Canada's natural resource sector. NRCan's application of innovative tools and technology has ensured that government services are focused on the needs of citizens.

In 2019, NRCan established the Digital Accelerator Initiative to support scientists' use of artificial intelligence (AI) and machine learning techniques aimed at increasing the development and use of advanced digital solutions for Canadian science, programs, and policies. In 2021-2022, NRCan will further pursue application of transformative digital technologies like AI and Big Data tools and techniques to support the transition to a low-carbon economy. These will be applied internally and with partners, to solve challenges, optimize productivity, enhance automation, streamline regulations, and increase efficiency in natural resources sectors.

Transport Canada

Transport Canada (TC) continues to play a critical role in the post-COVID-19 economic recovery through the modernization, development, delivery, and implementation of regulations necessary for a safe and secure transportation system.

In 2017, the Department introduced TC Transformation: Digital by Design, a plan which focuses on updating digital services and modernizing regulations in order to keep pace with rapid innovations in technology across the Canadian transportation system. The plan is redefining how TC approaches policy and program development, service innovation and use of data.

In 2019, TC led the Transportation Sector Regulatory Review Roadmap, where one of the key themes was greater digitalization of services to foster innovation and investment. This Roadmap allowed for the introduction of online licensing and examination for remotely piloted aircrafts systems; the digitalization of services for automated vehicles; connected vehicles and motor vehicle safety; and the introduction of a regulatory sandbox for dangerous goods electronic shipping documents.

TC is also achieving considerable progress toward modernizing its legislative and regulatory framework to support innovation and competitiveness through safe testing and experimentation of new technologies, along with a clear and agile pathway toward mature regulatory requirements.

For instance, in 2019, new authorities were proposed via the first Annual Regulatory Modernization Bill and subsequently in the Budget Implementation Act, 2019, No. 1, which established digital service delivery as the baseline expectation for TC's regulatory regime and created an exemption authority to support testing of new technology without compromising safety.

Finally, TC continues to work to improve the services it provides to Canadians. Projects include upgrading services at TC Centres across Canada to provide services such as licences and certifications more quickly and easily. The lessons learned during the COVID-19 pandemic have paved the way for continued digital transformation at TC and laid a strong foundation for the ongoing modernization of its services.

4.0 Digitalization and Technology-Neutral Regulations Roadmap initiatives

This section describes proposals that respond to issues mentioned during public consultations. These concerns have been made more urgent by the COVID-19 pandemic, which has highlighted how important digital tools are for spurring businesses' economic recovery, keeping Canadians connected, and governments operating. As a result, an "economic recovery" lens has been applied to the proposals.

The comments received from stakeholders who participated in the Canada Gazette and other consultations were reviewed by departments and agencies involved in the Digitalization and Technology-Neutral Regulations Roadmap (Roadmap). Nine departments and agencies identified 16 Roadmap proposals in the end. These proposals respond directly to stakeholder comments or proactively address challenges that businesses and others face. The Roadmap proposals are grouped under the following four themes:

Making requirements less prescriptive and more flexible
Using digital tools to improve interactions with the federal government on regulatory matters
Using digital tools to improve how the federal government manages data
Using novel approaches to promote technology neutrality and advance the use of digital tools in regulations

In addition to these 16 proposals, several initiatives included in the International Standards Roadmap relate to digitalization. These include a proposal from Innovation, Science and Economic Development Canada (ISED) to advance the development of international standards for digital credentials, as well as two proposals from ISED and the Standards Council of Canada to advance standardization-related efforts for artificial intelligence (AI). For further information on other Regulatory Roadmaps, please see the TBS website on Targeted Regulatory Reviews.

Theme 1: Making requirements less prescriptive and more flexible

This theme involves addressing prescriptive requirements in Acts and regulations, which specify how something must be done (e.g. reporting, testing, or monitoring) rather than what must be done. Prescriptive requirements can often be replaced with outcomes-based language that focuses on the results or goals that businesses and individuals must achieve rather than on the specific technologies or procedures they must use. When used appropriately, performance or outcome-based regulations can help support innovation and allow businesses the flexibility to choose the most appropriate technologies for meeting regulatory requirements.

The six proposals grouped under this theme seek to remove prescriptive requirements in Acts and regulations for specific – and especially outdated – digital tools or methods.

Enabling electronic signatures on tax forms

Current requirements presume that signatures on a prescribed taxation form must be handwritten. The Canada Revenue Agency (CRA) recognizes the need for digitally fillable and signable forms to facilitate voluntary tax compliance by Canadians. In February 2020, the CRA conducted online consultations to gauge the level of support for allowing electronic signatures on the T183, Information Return for Electronic Filing of an Individual's Income Tax and Benefit Return and T183CORP, Information Return for Corporations Filing Electronically forms. Over 6,000 Canadians responded to the consultation process with 95% indicating their support for this initiative.

The CRA is working with the Department of Finance to propose legislative changes that would enable electronic signature options in relation to certain specified taxation forms under the Income Tax Act and the Tax Rebate Discounting Act, including the T183/T183CORP information returns. These measures were announced in Budget 2021.

In addition to helping protect the health and safety of Canadians during this pandemic period, the electronic signature option would serve to reduce burden for tax professionals and taxpayers by removing financial and administrative processes associated with printing, mailing, and storing paper forms. It would also reduce travel required to manually sign the form.

The initiative will also serve to improve service to rural and remote communities as well as to individuals with accessibility issues.

In response to the global pandemic and the need to ensure the safety of Canadians through physical distancing, the CRA has been accepting electronic signatures on T183/T183CORP information returns since March 2020 using existing administrative flexibilities. The CRA is looking to make permanent these flexibilities through legislative changes to the Income Tax Act.

Lead: Canada Revenue Agency

Contact information:
Claire Arjang, Manager, Regulatory Affairs Section, Legislative Policy Directorate
Legislative Policy and Regulatory Affairs Branch
Canada Revenue Agency
Claire.Arjang@cra-arc.gc.ca

Improving regulatory agility in international waste management

Industries have expressed interest in adopting alternative, cost-effective methods for continued mitigation of biosecurity risks associated with international waste. The current Health of Animals Regulations prevent airline and shipping industries from leveraging alternative technologies for disposing of certain waste accumulated on vessels and aircraft in transit to Canada. Specifically, the regulations require these industries to incinerate, heat-treat and/or place in a landfill international aircraft garbage and certain ship waste containing or suspected of containing animal products and animal by-products.

In response to this issue, the Canadian Food Inspection Agency (CFIA) proposes to amend the Health of Animals Act and the Health of Animals Regulations. This would create flexibility in international waste disposal requirements by adding a more outcome-based approach that would allow industry to adopt different technologies. Regulated parties would need to demonstrate, based on scientific evidence, the efficacy of the alternative technology in mitigating risks to Canada's animal health resource base in order to gain the requisite CFIA approval to use the technology.

Amending the Health of Animals Regulations would increase flexibility and options available for airline, shipping, associated food service companies, and waste disposal service providers to achieve regulatory compliance. It would also reduce regulatory burden and could promote growth in Canadian sectors for alternative waste management technologies. Finally, the proposal would address long-standing industry difficulties with the rigidity of the current regulations.

CFIA would seek to include proposed amendments in future versions of the Annual Regulatory Modernization Bill or next available legislative amendment vehicle. Once legislative authorities are secured, CFIA would begin stakeholder engagement activities for the regulatory amendments. Proposed amendments to the Health of Animals Regulations would be targeted for pre-publication in Canada Gazette, Part I by 2024. Final publication of the amendments in Canada Gazette, Part II and posting of the revised International Waste Directive on CFIA's website would be targeted for 2025.

Lead: Canadian Food Inspection Agency

Contact Information:
Regulatory, Legislative and Economic Affairs Division
Policy and Programs Branch
Canadian Food Inspection Agency
cfia.legislation-legislation.acia@canada.ca

Removing place-based application barriers to immigration

Immigration, Refugees and Citizenship Canada's (IRCC) clients have consistently called for more and better digital services. People applying to come to Canada have also expressed frustration with current rules, which are based on the place where an application is made (for example, rules preventing people from applying for immigration if they are already in Canada). Many of these restrictions do not fit in with the increasing use of online applications and in some cases make it difficult for IRCC to offer more services digitally.

These application barriers have also posed additional challenges during the COVID-19 pandemic. Employers have faced difficulties finding the workers they need. At the same time, temporary residents who would like to contribute their labour and skills to Canada's recovery have been unable to make applications due to travel and service restrictions. As a temporary measure, IRCC has introduced a new public policy to allow certain visitors to apply for work permits without having to leave the country.

To address these barriers in a permanent and sustainable way, IRCC is proposing to amend provisions in the Immigration and Refugee Protection Regulations that were originally designed for paper-based applications to be submitted and processed at fixed locations. The removal of these place-based application barriers would align Canada's immigration regulations with an increasingly digital processing model and support the expansion of online applications.

These changes would reduce client irritants and improve operational efficiency, allowing foreign nationals already in Canada to seek authorization to study or work in Canada without having to leave the country to apply. These changes would also support businesses and industries that hire temporary workers and would support efforts to attract and retain more international students.

Work is already underway on regulatory changes, and IRCC is targeting amendments to the Immigration and Refugee Protection Regulations in the Canada Gazette, Part I in early 2022 and final publication in the Canada Gazette, Part II in the second half of 2022.

Lead: Immigration, Refugees and Citizenship Canada

Contact information:
Patrick McEvenue, Senior Director
Digital Policy
Strategic Policy and Planning Branch
Immigration, Refugees and Citizenship Canada
IRCC.Digital-Numerique.IRCC@cic.gc.ca

Removing paper-based requirements in Measurement Canada's regulations

The paper-based and physical location-based requirements in the Electricity and Gas Inspection Regulations and the Weights and Measures Regulations are outdated and prescriptive. This adds administrative burden to stakeholders, including Authorized Service Providers who deliver services on behalf of Measurement Canada.

Measurement Canada proposes to update the wording of the Electricity and Gas Inspection Regulations and the Weights and Measures Regulations by removing requirements for specific methods of exchanging information and communicating with stakeholders. These changes would allow regulated parties more flexibility in meeting the requirements, which may result in economic efficiencies for both stakeholders and Government and allow access to digital services.

Measurement Canada anticipates proposing these regulatory amendments in the Canada Gazette, Part I in spring 2022, with final publication in the Canada Gazette, Part II planned for winter 2023.

Lead: Measurement Canada (Innovation, Science and Economic Development Canada)

Contact information:
Legislative Policy and Regulatory Affairs
Measurement Canada
Small Business and Marketplace Services
Innovation, Science and Economic Development Canada
ic.mcinfo-infomc.ic@canada.ca

Enabling assessment of individual debtors by videoconference

The Office of the Superintendent of Bankruptcy Canada (OSB) has been exploring ways to help its stakeholders go paperless and improve insolvency processes through the use of modern technology. The need for this work accelerated as a result of the COVID-19 pandemic due to the restriction on meeting in-person and health and safety concerns.

Licensed Insolvency Trustees (LITs), the private sector group providing insolvency advice and services in Canada, have indicated in the past that in-person assessments of individuals looking for solutions to their financial difficulty (debtors) are not always feasible; this issue has been magnified by the COVID-19 pandemic.

In order to file an insolvency proceeding in Canada, people with financial difficulties must be assessed by an LIT. The current OSB directive requires that this assessment be completed in-person, except in designated areas or unless exceptional circumstances exist. In these cases of exemption, the LIT must ask for permission from the OSB in advance to conduct a remote assessment.

To address this issue, OSB is proposing the use of videoconferencing and other remote technology in insolvency processes, as they provide the necessary flexibility for Canadians during challenging times.

In March 2020, the OSB offered greater flexibility to both LITs and debtors, by allowing these assessments to take place by video-teleconference or other remote technology. This temporary change will be in effect until December 31, 2021, and allows LITs and debtors to reduce their chance of exposure during the pandemic by working remotely and in a way that many debtors want to be served. The OSB will measure the success of this temporary change, and may make this change permanent, if it is deemed effective and the feedback is positive.

In November 2020, OSB completed a targeted consultation with LITs, debtors, and OSB staff. The results of this consultation have been compiled and analyzed. The results are being presented to OSB senior management and a working group has been struck to study the best plan for moving forward. As the current relief for remote assessments has been extended to December 31, 2021, it is OSB's intention to have a permanent solution in place, if possible, before this deadline.

Lead: Office of the Superintendent of Bankruptcy Canada (Innovation, Science and Economic Development Canada)

Contact information:
Policy and Regulatory Affairs
Office of the Superintendent of Bankruptcy Canada
ic.osbregulatoryaffairs-affairesreglementairesbsf.ic@canada.ca

Enabling use of e-signatures for handling estate trust funds

Licensed Insolvency Trustees (LITs) are the federally regulated professionals who administer insolvency proceedings. As part of their responsibilities during an insolvency proceeding (bankruptcy or proposal), LITs hold in their trust the money from estates that they are overseeing in trust accounts held by the bank. They are required, by Superintendent's Directive, to complete regular reconciliations of estate trust funds with statements from the banks where the trust accounts are held.

In order to ensure this money is well managed, LITs are required to provide their financial records to the OSB or those entitled to the estate records, which they must print and sign by hand. Any discrepancies require an explanation from the LIT and their bank reconciliation previously required a wet signature on each form. Their signature confirms that they believe the report is fully completed and that the numbers are accurate.

This requirement for wet signature adds additional costs and prevents LITs from using existing insolvency administration software packages to complete estate trust fund reconciliations. Additionally, in a COVID-19 environment, requiring a wet signature does not support the recommended physical distancing measures, and many LITs have shifted their practices to working from home, meaning that office printing facilities are not readily available.

Given the pandemic, this was an item that OSB felt could easily be simplified and done remotely, by allowing for the temporary use of electronic signatures on bank reconciliations. Allowing LITs to use technology to apply an authenticated electronic signature to these records, instead of printing and signing them by hand, represents savings for LITs in terms of cost and time, while also reducing paper use.

After consultation and looking at the impact on the insolvency system of allowing electronic signatures for LITs on their bank reconciliation, the OSB made this change permanent with the release of Superintendent's Directive 5R6, Estate Funds and Banking issued July 14, 2020, giving LITs the flexibility to use either a wet signature, or the new e-signature option.

Lead: Office of the Superintendent of Bankruptcy Canada (Innovation, Science and Economic Development Canada)

Contact information:
Policy and Regulatory Affairs
Office of the Superintendent of Bankruptcy Canada
ic.osbregulatoryaffairs-affairesreglementairesbsf.ic@canada.ca

Theme 2: Using digital tools to improve interactions with the federal government on regulatory matters

This theme focuses on simplifying interactions with the federal government. This involves digital tools that focus on user needs, and that are able to share information within departments and agencies as well as with other government information management and information technology (IM/IT) systems. These tools help users to navigate government websites and also improve client services and business processes, including the collection, monitoring and reporting of information, facilitation of electronic payment, and other work needed to meet legal requirements.

The four proposals under this theme aim to achieve these goals by building digital tools and procedures to inform businesses about legal requirements or to allow them to more easily meet these requirements.

Modernizing CBSA accounting processes for commercial importers

Stakeholders have commented that current Canada Border Services Agency (CBSA) processes for commercial imports and assessing duties and taxes require extensive administration by both importers and the Government of Canada. They also often require substantial paperwork or rely on an assortment of aging IT systems. This approach is inefficient and costly for both importers and the Government of Canada. Since the COVID-19 pandemic, digital or "contactless" modes of communication and exchange of information have become even more important for Canadian importers and the Government of Canada.

The CBSA proposes to implement the CBSA Assessment and Revenue Management (CARM), a multi-year initiative that would transform the importation process. CARM seeks to digitalize paper-based administrative processes by allowing importers to use online tools to classify goods, and calculate duties and taxes. CARM would improve processes for accounting and revenue assessment by modernizing IT systems and creating an electronic portal to allow Trade Chain Partners (TCPs) to manage their account electronically. Additionally, the electronic portal will enable the CBSA and TCPs to securely communicate with each other electronically.

To enable CARM to become fully implemented, legislative and regulatory changes are required. The CBSA is proposing changes to the Customs Act through the second Annual Regulatory Modernization Bill or another legislative vehicle that would specify that all bonds, deposits or other securities required under the Customs Act be in a form to be specified by the Minister. This would facilitate electronic filing and submissions, including the manner of serving documents and the manner of payment. The CBSA is also proposing to then amend the Accounting for Imported Goods and Payment of Duties Regulations to stipulate that the Minister may send and receive payments electronically, as well as to harmonize billing cycles and payment due dates for imported goods. These regulatory changes would align with the changes being proposed for the Customs Act.

Overall, CARM is expected to deliver up to $2 billion in total benefits by 2031, principally benefiting Canadian importers. Benefits are expected to begin to accrue in 2022, once implementation is complete.

Specifically, the proposed legislative and regulatory changes would enable CBSA to do the following:

Harmonize billing cycles and payment and interest due dates for imported goods.
Allow electronic methods of payment under the Customs Act. Section 3.5 of the Customs Act is the only provision which mentions the place where the payments for amounts in excess of an amount specified by the Minister may be made. The payments may be made at a bank, a credit union, or authorized corporations. For amounts less than what is specified, there is no provision which clarifies how payments are to be made.
Allow commercial importers to submit documents to, and receive documents from, the CBSA through the electronic portal. Electronic communication is a key CARM component that would benefit both commercial clients and the CBSA as, currently, the regulations stipulate that communication between the CBSA and importers be sent by mail or courier.
Authorize financial security to be posted electronically. The Customs Act does not currently authorize the Minister to administer financial security electronically. The current approach is highly inefficient and costly for both importers and government. Using electronic bonds (e-bonds) would allow TCPs to reduce their administrative burden associated with paper-based forms of security. The proposed changes would allow the CBSA to facilitate the trading community's responsibility to comply with their payment obligations.

The proposed changes to the Customs Act will come into force upon Royal Assent of the second Annual Regulatory Modernization Bill, or another legislative vehicle. Subject to legislative changes being complete, regulatory amendments would come into force in the second half of 2022. CBSA is proposing amendments to the Accounting for Imported Goods and Payment of Duties Regulations, Customs Bonded Warehouses Regulations, Customs Brokers Licensing Regulations, Customs Sufferance Warehouses Regulations, Duty Free Shop Regulations, Special Services (Customs) Regulations, Special Services Regulations, Temporary Importation (Tariff Item No. 9993.00.00) Regulations, Temporary Importation (Excise Levies and Additional Duties) and Transportation of Goods Regulations.

Lead: Canada Border Services Agency

Contact information:
Janine Harker
Commercial and Trade Policy Division
Strategic Policy Branch
Canada Border Services Agency
Janine.Harker@cbsa-asfc.gc.ca

Modernizing regulatory design, implementation, and evaluation at ECCC

During consultations held in 2019 with businesses and others, many businesses reported that the administrative activities they have to carry out to comply with Environment and Climate Change Canada (ECCC) regulations are burdensome. Although ECCC does have some online systems for reporting, permitting, and tracking information, the vast majority of regulations — including 80% of regulations that require reporting — have none. Businesses have also found that many of the online systems that do exist do not meet their expectations for reliability or ease of use. In addition, many of these systems do not allow electronic signatures and submissions of large amounts of data at the same time, cannot handle expanding user demands, and still require most information that businesses must provide to be entered multiple times for different regulations and reporting systems.

In addition, ECCC's current data management systems stand in the way of better analysis of environmental data, more effective performance assessment, and more timely sharing of environmental information with businesses and the public.

To address these issues, ECCC's objective is to move toward an enterprise digital solution for the entire "life cycle" of ECCC regulations – that is, from data collection all the way to reviewing current regulations and creating new ones. Ultimately, this will improve services to Canadians by streamlining and digitally enabling its collection, reporting, permitting, tracking, and analysis of regulatory information at ECCC.

Pursuing this enterprise vision for ECCC will involve work on the following projects between 2021 and 2024, as a first step toward achieving this goal. Projects to be pursued over the initial three-year period of this initiative consist of two prongs:

Two "strategic" projects to lay the groundwork for the digital transformation of ECCC regulatory work by:
- 1. developing options for pursuing enterprise approaches based on an analysis of government and client needs, costs, and benefits;
- 2. pursuing implementation of the required digital infrastructure related to analysis and reporting out.
Four "tactical" projects that can be implemented in the short term to address inefficiencies and technical inadequacies in reporting and other processes. These projects would involve:
- 3. stabilizing the National Pollutant Release Inventory reporting system to reduce technical problems;
- 4. reviewing existing federal and provincial environmental emergencies regulations in order to identify opportunities for harmonization and for eliminating duplication;
- 5. collecting regulatory metadata as a first step in building an online tool to help businesses find information on regulations;
- 6. increasing the limit on the size of files that businesses can submit to meet ECCC reporting requirements (completed in 2019-2020).

In the short term, this Roadmap initiative will remove certain key stakeholder irritants. In the long term, the enterprise system to which ECCC is moving will have important benefits for both businesses and Canadians, including:

making it faster, cheaper, and easier to interact with ECCC, whether to obtain environmental permits or to submit information to meet environmental requirements;
making more "open data" on the environment available to businesses and the public; and
better integrating regulations, procedures for administering them, and associated information management/information technology infrastructure across different programs, making it unnecessary for businesses to report the same information to ECCC more than once.

The Centre for Regulatory Innovation has contributed funding for projects 1, 3, and 5 as described above.

ECCC is aiming to complete all six projects described above by March 2024.

Lead: Environment and Climate Change Canada

Contact information:
Melanie Melo, Senior Advisory Manager, Branch Coordination
Environmental Protection Branch
Environment and Climate Change Canada
melanie.melo@canada.ca

Modernizing the Citizenship Program

Clients and stakeholders expect timely processing of their citizenship application, which builds confidence in the Citizenship Program and trust in government services. However, the Citizenship Program is heavily paper based and reliant on in-person services, which affect processing efficiency and client service. The COVID-19 pandemic exacerbated this reality with the onset of remote work and the suspension of in-person services, underlining and accelerating the need to move towards on-line and virtual services.

The move towards digitalization is limited by the absence of explicit authorities in the Citizenship Act to electronically administer and enforce the Citizenship Program, similar to those available under the Immigration and Refugee Protection Act. To address this issue, IRCC proposes to secure new legislative authorities related to biometrics and automation. These authorities are integral to continued digitalization and are at the core of future advancements in processing and decision-making for the Citizenship line of business. These new authorities would allow for digital/electronic administration, improving client service and strengthening identity management and enforcement of the Citizenship Program.

Once new legislative authorities are secured, the intent would be to pre-publish draft amendments to the Citizenship Regulations in the Canada Gazette, Part I (aiming for 2023-24) with the goal of final publication in the Canada Gazette, Part II (aiming for 2024-25).

Lead: Immigration, Refugees and Citizenship Canada

Contact information:
Teny Dikranian, Director
Legislation and Program Policy
Citizenship Branch
Immigration, Refugees and Citizenship Canada
IRCC.CITConsultations-ConsultationsCIT.IRCC@cic.gc.ca

Modernizing CFIA inspection tools

In light of the COVID-19 pandemic, businesses have expressed interest in the CFIA looking at ways to carry out its responsibilities in order to avoid disruptions to Canada's food, plant, and animal supply chains. As a modern regulator, CFIA is always open to identifying ways to improve how it can carry out its enforcement mandate in a safe, timely, and thorough manner.

In response, CFIA is reviewing its existing legislation to determine whether legislative changes are needed to support the use of technology in carrying out inspection powers, duties, and functions virtually. This may include, as appropriate, amendments to the Canadian Food Inspection Agency Act, Safe Food for Canadians Act, Feeds Act, Fertilizers Act, Seeds Act, Plant Protection Act, and Health of Animals Act and associated regulations to provide additional clarity, where required. In addition, CFIA is reviewing its guidance documents and business practices to support this work. This proposal would also consider improving alignment with health portfolio partners' approach to the use of telecommunication in inspection activities.

Providing clarity on the use of technology to augment inspection activities, as needed, would offer numerous benefits to regulated parties, regulators, and the public. Using virtual-based inspection and compliance tools could improve the efficiency of service delivery and have cost benefits. In addition, this proposal could strengthen collaboration between CFIA and regulated parties in terms of compliance and oversight, which may reduce burden on stakeholders. CFIA would also be in a better position to deliver critical inspections during times of disruption to uphold a sufficient and safe food supply. This approach could mitigate challenges and risks in emergency situations. For example, it would support adherence to public health directives during a pandemic by reducing contact between stakeholders and CFIA staff.

CFIA would seek to include any proposed legislative amendments in future versions of the Annual Regulatory Modernization Bill or the next available legislative amendment vehicle, as needed. Depending on the nature of any legislative amendments, CFIA would pursue associated regulatory amendments that may be needed through the Canada Gazette process between 2022 and 2024.

Lead: Canadian Food Inspection Agency

Contact information:
Regulatory, Legislative and Economic Affairs Division
Policy and Programs Branch
Canadian Food Inspection Agency
cfia.legislation-legislation.acia@canada.ca

Theme 3: Using digital tools to improve how the federal government manages data

This theme involves improving federal government data management to reduce the time and effort that businesses and regulators expend on tasks involving the generation and management of regulatory data.

The three proposals under this theme seek to bring in better tools and methods for sharing data both within the federal government and between federal and provincial/territorial governments, and to allow the federal government to be more efficient and effective in its use of information management (IM) tools and technologies.

Modernizing Immigration, Refugees and Citizenship Canada's information-sharing legal framework

Provinces and territories, businesses and IRCC clients have called on IRCC to reduce processing times and improve service delivery so that immigrants can more quickly integrate into the labour market. Some provinces and territories have also raised concerns that long processing times (particularly for paper-based applications) undermine their competitiveness.

IRCC proposes to amend the Department of Citizenship and Immigration Act and the Immigration and Refugee Protection Act through the second Annual Regulatory Modernization Bill to complement and expand existing information-sharing authorities in IRCC program legislation. New legislative authorities would support digital processing automation and the use of client information across its programs for better client service, identity management and improved program integrity. This would also enable IRCC to pursue the development of digital tools for application processing that could be used by other federal departments and provinces and territories. This would allow clients to benefit from a combination of services without having to provide the same information to multiple times.

After seeking new legislative authorities, IRCC would pursue two phases of work. First, IRCC would engage programs to identify information-sharing needs, processes, and internal control mechanisms, supported by privacy impact assessments as needed; this work would inform the establishment of particular parameters of use and disclosure of information. Second, IRCC would enact new regulations to set out the use and/or disclosure of information collected by IRCC for transparency purposes.

A modern information-sharing framework would result in more efficient processing of applications and make it easier for people to come to Canada both temporarily (e.g. visitors, international students, and temporary workers) and permanently. Further, it would enable IRCC to be more nimble in fulfilling its mandate. As was underscored in COVID-19 response efforts, organizations must have the ability to quickly adapt to changing circumstances, which may require processes and procedures to be revisited. A more modern information-sharing framework would improve IRCC's ability to streamline and adapt processes as required, while continuing to ensure public safety and security. The proposed legislative amendments would also align with the Treasury Board Secretariat's initiatives for the Government of Canada ("tell-us-once"), with new policies on service and digital, reviews on data sharing, and significant provincial and territorial collaboration on digital identity.

The proposed amendments to the Department of Citizenship and Immigration Act and the Immigration and Refugee Protection Act would come into force upon Royal Assent of the second Annual Regulatory Modernization Bill. IRCC would target 2023 for pre-publication in the Canada Gazette, Part I of new regulations under the Department of Citizenship and Immigration Act, and the Immigration and Refugee Protection Act, as required, and final publication in the Canada Gazette, Part II in 2024.

Lead: Immigration, Refugees and Citizenship Canada

Contact information:
Adrienne Christie, Assistant Director
Intergovernmental Relations
International and Intergovernmental Relations Branch
Immigration, Refugees and Citizenship Canada
Adrienne.christie@cic.gc.ca

Streamlining regulatory review of mining projects

The regulatory process for mining projects can be difficult to navigate and represents a significant investment in resources by mining companies. Industry stakeholders have identified the length and lack of coordination in the review process as major hurdles to overcome to get approvals. Regulators have indicated that they struggle to get the data they need to make decisions and that incomplete applications slow down the process.

Facilitated by funding from the Centre for Regulatory Innovation, Natural Resources Canada (NRCan) is planning to develop the following digital tools to contribute to the streamlining of the regulatory process for mining projects: a regulatory guidance tool to help industry navigate the approvals process, integrated solutions to simplify submissions and interactions, and a data leveraging tool to share available data. NRCan is planning to work with federal regulators involved in the approvals process for mining projects to identify opportunities for collaboration. The intent is for these tools to be integrated into the existing regulatory process to reduce the time and effort it takes mining projects to move from exploration to production, while not impacting the integrity of the process.

Research on issues and digital technologies to address these is currently complete and plans to collaborate to develop digital tools have been made. Pilot projects are being undertaken, with completion planned for March 2022.

Lead: Natural Resources Canada

Contact information:
Connie Smith, Senior Mining Engineer, Transformative Technologies and Specialized Services
CanmetMINING in the Lands and Mineral Sector
Natural Resources Canada
connie.smith@canada.ca

Digitalization of the Pre-Load Air Cargo Targeting Program

Air cargo stakeholders have requested a simple and seamless digital information exchange for air cargo as they plan and coordinate recovery efforts from COVID-19. As it stands, it is difficult for industry to share critical information in a timely manner due to the stalled development of enabling technology and a complimentary legal framework. As Canada lags in its solidification of a Pre-Load Air Cargo Targeting (PACT) Program, industry is aware of an increasing gap with countries and jurisdictions like the United Kingdom, United States and European Union that are advancing similar programs using emerging technologies, like AI. More than ever, industry is supportive of enhanced security measures that can be applied early, and digitally, so as not to disrupt the flow of cargo.

PACT began as a joint pilot initiative between the CBSA and Transport Canada (TC) in 2012 involving primarily volunteer air carriers. To date, the PACT work consists of using data from air carriers (e.g. cargo manifests) to conduct risk assessments on a limited number of flights. The aim is to identify potentially high-risk cargo prior to its uplift onto an aircraft at a foreign port, allowing for mitigation measures to be applied as early as possible.

To date, PACT has received over 7 million messages, and through manual processes, has been able to risk assess 1.5 million of them (roughly 25% of the total). The volume of received messages comprises only approximately 15% of the total airway bills for cargo inbound to Canada from around the globe. Without a modern technological solution, current methods of intake (via email) and analysis (through spreadsheets) can only scratch the surface of the incoming data. Without a firm commitment from TC to transition this pilot to a permanent program with accompanying regulations, industry members are reluctant or no longer willing to invest the ongoing resources necessary for participation.

To address this issue, TC is planning to finalize the development of a cutting-edge system powered by AI that will allow the PACT Program to leverage data to risk-assess all air cargo incoming to Canada. The use of AI will transform the way air cargo information is received and handled; how risk is assessed by TC and among security partners; and how oversight is conducted in the wake of COVID-19.

Proposed regulatory amendments to the Canadian Aviation Security Regulations, 2012 are necessary to compel all air carriers to submit the data to TC, and would detail the applicable mitigation measures should a potential risk to aviation security be identified. TC would also seek enabling legislative authorities through future versions of the Annual Regulatory Modernization Bill, or another legislative vehicle, to streamline and clarify the Minister's authority to collect, retain and share passenger and commercial/customs information, and to use automated systems, such as AI, to assess risk.

Together, the technical solution and the regulatory changes will facilitate the safe and efficient movement of secure cargo in the wake of COVID-19, and ensure that the Canadian air cargo industry emerges on a level playing field with major competitors.

Regulatory amendments are targeting pre-publication in the Canada Gazette, Part I in fall 2022, followed by final publication in the Canada Gazette, Part II in fall 2023 contingent on the completion of the required system. Legislative amendments would target 2022-2023 pending further policy development.

Lead: Transport Canada

Contact information:
Pre-Load Air Cargo Targeting (PACT) Unit
Passenger Protect Program and Targeting Operations Branch
Transport Canada
PACT-Information-CFAPC@tc.gc.ca

Theme 4: Using novel approaches to promote technology neutrality and advance the use of digital tools in regulations

This theme involves testing new approaches to regulating as well as new tools and technologies to support more effective management of regulations.

Three proposals under this theme make use of new tools or technologies to help in managing work related to regulations and/or support the development of future policy and regulatory frameworks.

Easing regulatory burden through digital credentials

Administrative steps to comply with regulations can be costly and time-consuming for businesses. A significant part of this burden stems from the Government of Canada's reliance upon manual processes to validate the origin and authenticity of information received. This time consuming exercise is a constant challenge for regulators and creates red tape for regulated parties who have to comply with outdated processes. In attempts to patch inefficiencies and provide services digitally, several regulators have ported paper-based mechanisms into digital formats, but failed to leverage technology to verify that the information they receive is authentic and up-to-date. Concrete examples include the challenges with commonly used digital versions of documents, such as scanned documents, which are easy to forge and require manual processes to verify.

Digital credentials are digital versions of documents, such as licences, permits, degrees and business registrations, issued by governments and trusted organizations directly to a digital wallet. They enable businesses and regulators to more easily engage in digital transactions by making it easier to share key documents and to verify the authenticity and the issuer of those documents. That way, when a business needs to interact with government—or other entities—and prove they are authorized to conduct regulated activities, interested parties can easily validate this claim using the tamper-evident digital credential issued by a trusted government entity. This is expected to facilitate the provision of regulatory compliance data to government departments and agencies, reduce the risk of fraud, and provide Canadians with more control over with whom they share their information, in line with the principles of Canada's Digital Charter.

Additionally, in the context of the COVID-19 pandemic, there is a strong desire to rely less on in- person and paper-based transactions to help minimize the risks for businesses and front-line workers. Digital credentials support physical distancing and help to reduce the risk of virus transmission through physical (e.g., paper-based) credentials.

National Digital Trust Service Proof of Concept

ISED is leading a proof of concept for a National Digital Trust Service with businesses, not-for-profits and regulators with the goal of making it quicker, easier and more cost-effective to issue and verify digital credentials. The National Digital Trust Service proof of concept is supporting select businesses, not-for-profits and regulators in executing proof of concepts for their respective digital credential use cases, simultaneously advancing awareness and adoption of digital credentials across government and the economy. The National Digital Trust Service is intended to be horizontal in nature and is expected to make it more efficient for all interested participants to issue and consume digital credentials by avoiding the need to implement and maintain individual technology solutions. The Service would be a big step forward in establishing a digital trust infrastructure for Canada. The National Digital Trust Service proof of concept is funded by the Centre for Regulatory Innovation.

During Phase 1 (fall 2020 to spring 2021), ISED established the prototype for the National Digital Trust Service and developed the digital credential use cases with participants. In Phase 2 (spring 2021 to spring 2022), ISED will begin testing the National Digital Trust Service with participants and their use cases, improving the service based upon feedback and results.

Educational Approaches for Digital Credentials Pilot

ISED is developing and piloting educational approaches to help regulators, businesses, and other entities to adopt and use digital credentials to simplify and digitalize their processes, including for regulatory compliance and trade. This in turn would enable regulatory digitalization, the ability to transact digitally across the economy, and the reduction of regulatory and administrative burden. The Educational Approaches for Digital Credentials pilot is funded by the Centre for Regulatory Innovation.

The first phase (fall 2020 to spring 2021) consisted of developing three educational approaches for testing with participants. During Phase 2 (spring 2021 to spring 2022), ISED will be piloting different combinations of educational approaches with testing groups to determine which approaches are the most effective.

Business Banking Digital Credentials Pilot

ISED, the British Columbia and Alberta governments, ATB Financial and select Canadian banks are partnering on an initiative to issue and verify key documents as digital credentials to facilitate regulatory compliance and end-to-end digital transactions, such as opening business bank accounts. This pilot project is expected to save businesses time and effort by not having to rely upon in-person and paper-based processes. This has the potential to increase the percentage of business bank accounts that can be opened digitally, from 10% to 80%.

During Phase 1 of the pilot project (fall 2020 to spring 2021), ISED, British Columbia and Alberta built the capability to issue digital credentials to businesses, held in their digital wallets. In Phase 2 (spring 2021 to summer 2022), ISED will work with ATB Financial and select Canadian banks to test the acceptance of these digital credentials so businesses can open bank accounts without having to resort to in-person and paper-based processes.

Lead: Innovation, Science and Economic Development Canada

Contact information:
Digital Policy and Service Innovation
Digital Design Branch
Innovation, Science and Economic Development Canada
digitaltrust-confiancenumerique@canada.ca

Drafting regulations in machine-readable code

The Labour Program, part of the Employment and Social Development Canada (ESDC) portfolio, is currently undertaking a review of the Motor Vehicle Operators Hours of Work Regulations (MVOHWR) enabled under Part III of the Canada Labour Code. The MVOHWR have remained largely unchanged since coming into force in 1973, with the last modification occurring in 1995. The review seeks to identify and update aspects of the regulations in need of modernization.

In the context of this review, the Labour Program is collaborating with the Canada School of Public Service, the Department of Justice, and the Community of Federal Regulators on a "rules as code" project, which would support development and publication of the MVOHWR, in whole or in part, in machine-readable language. To achieve this objective, required amendments to the MVOHWR will be drafted simultaneously in English, French, and machine-readable code.

Regulatory clarity resulting from machine-readable code opens up several opportunities for stakeholders, including the creation of a downloadable Application Programming Interface (API), to update payroll systems quickly and efficiently. This work is expected to ease the implementation process, and make it easier for stakeholders to comply with regulatory requirements. The Labour Program would assist interested stakeholders who may be interested in further developing industry wide calculating tool and/or an application.

Stakeholders reiterated their support for the publication of the MVOHWR as machine-readable code in consultations that took place in February 2021. The process of translating the existing regulations into code was completed in March 2021. Updates to the machine-readable code will occur as proposed regulatory amendments are drafted. Draft regulations are targeted for publication in the Canada Gazette, Part I in fall 2021, and final regulations in the Canada Gazette, Part II in mid 2022.

Lead: Labour Program (Employment and Social Development Canada)

Contact information:
Danijela Hong, Director, Labour Program
Employment and Social Development Canada
danijela.hong@labour-travail.gc.ca

Sharing product data to improve supply chain transparency

Consumer and other products contain a wide range of chemicals, some with impacts on the health of Canadians and/or the environment. Finding out what chemical is in any given product can be a challenge for government, companies and consumers alike. Companies need greater and more timely access to information about the chemicals in their products in order to comply with regulations, set and meet sustainability targets, and create products that are less harmful to the environment and the health of Canadians. Consumers also want such information so that they can make more informed choices about the products they buy and use.

The project will explore ways to achieve greater sharing of information about chemicals in products across entire product supply chains. These could include:

making changes to legislation or policies related to chemicals in products;
bringing in voluntary measures to spur companies to collect and share more product information with interested parties;
connecting Canadian companies to government programs that support the creation of affordable digital systems by Canadian companies for their own use, to allow more of them to collect and share product information in digital form.

The project's long-term vision is greater availability and accessibility of product ingredient data, particularly in digital form, which could be achieved through digital, policy, or legislative tools as appropriate.

Better access to data on product ingredients would benefit businesses, the public and government. It would allow for more efficient and effective chemicals management and support regulatory compliance, safer products and more informed consumer choice.

The project will begin with a one-year consultation phase (2021–2022). During this phase, ECCC will engage with a wide range of stakeholders (including chemical and product manufacturers, retailers and non-governmental organizations) through a policy lab approach. The goal will be to co-develop options and test new approaches for enhancing supply chain transparency as well as the use of mandatory labelling for certain consumer products. This stakeholder consultation phase will lead to recommendations both for mandatory labelling and for improving the flow of information about chemicals in products in the Canadian marketplace and access to product information for consumers. ECCC will prepare a report summarizing the results of the consultations.

In 2022-23, ECCC will analyze options and make recommendations regarding possible changes to relevant legislation, regulations or policies, and seek stakeholder input on these. Depending on the results of this phase, ECCC could then begin work in 2023-2024 to develop legislative and/or voluntary tools as appropriate.

The Centre for Regulatory Innovation has contributed funding for this project.

Lead: Environment and Climate Change Canada

Contact information:
Alex Cavadias, Acting Director, Products Division
Environmental Protection Branch
Environment and Climate Change Canada
alex.cavadias@canada.ca

5.0 Issues not addressed

While all comments provided by stakeholders were considered carefully, some of the issues raised are not being addressed in this Digitalization and Technology-Neutral Regulations Roadmap. Issues that are not being addressed through this Roadmap fall into three general categories:

Issues covered by the first round of Targeted Regulatory Reviews
Issues outside the scope of the Digitalization and Technology-Neutral Regulations Review
Issues not being addressed for other specific reasons

5.1 Issues covered by the first round of Targeted Regulatory Reviews

Several stakeholders mentioned regulatory irritants that were previously identified as part of the first round of Targeted Regulatory Reviews (i.e., Agri-Food and Aquaculture, Health and Bioscience, and Transport and Infrastructure), which are outside the scope of this Review.

In some cases, stakeholders recommended that commitments made by departments and agencies involved in the Round 1 of Regulatory Reviews be modified to incorporate novel digitalization or technology-neutral components. Those departments and agencies have committed to considering the feasibility and timing of such additions, and to implementing them on a case-by-case basis. These include recommendations made regarding the Food and Drug Regulations.

5.2 Issues outside the scope of the Digitalization and Technology- Neutral Regulations Review

Some stakeholders identified issues that fall outside of the scope of this Review. These include reviewing existing rules governing the entry of specific foreign drugs or medical instruments into the Canadian market, gene editing and pest management regulations, and launching new immigration programs to address employee shortages. Other stakeholder suggestions were excluded if they would have unduly compromised the Government of Canada's mandate to protect health, safety or the environment.

5.3 Issues not being addressed for other specific reasons

A small number of issues raised by stakeholders are not being addressed through this Roadmap for other reasons. These include the following three issues, which would require significant analysis and further consultation with stakeholders:

Existing processes for border customs are inefficient and burdensome. The Government of Canada should research the use of innovative technologies, such as blockchain, to store customs data and leverage the use of smart phone applications for transit documents.

The Canada Border Services Agency currently has no short- or medium-term plans to leverage blockchain or other similar technologies to store customs data. However, regulatory cooperation initiatives are currently in place to further ease trade flows between Canada and its trading partners. For example, as described in this Roadmap, Innovation, Science and Economic Development Canada is leading work to provide digital credentials to businesses operating in Canada, which could eventually yield applications for transit purposes.

Digital technology adoption is challenging for Canadian small and medium-sized businesses and access to reliable, high-speed internet is an ongoing issue in rural areas.

Those issues are connected and require a coordinated response to fully address the complex challenges they present. As more and more industries embrace the digital economy, Canadian workers will need new tools and new skills in order to stay competitive. Although a full resolution will take time to achieve, the Government of Canada is implementing Canada's Innovation and Skills Plan to strengthen Canadian competitiveness and ensure all Canadians have the digital skills and opportunities to participate online.

Furthermore, the Government of Canada recently announced that it is accelerating its efforts to ensure all Canadians have access to high-speed Internet, no matter where they live. To that end, in Budget 2021, the Government announced another $1 billion over 6 years for the Universal Broadband Fund, to support access to high-speed internet by Canadians in rural and remote communities. Previously, the Government committed an additional $750 million over five years for larger, high-impact projects on top of the original billion announced in Budget 2019. In total, $2.75 billion will be provided over seven years starting in 2020-2021 through the Universal Broadband Fund. This funding is intended to connect 98 per cent of Canadians by 2026, up from the original target of 95 per cent in that year, and 100 per cent of Canadians by 2030.

Additionally, in Budget 2021 the Government announced $4 billion in funding for the Canada Digital Adoption Program. This program will create thousands of jobs for young Canadians, and will help as many as 160,000 small and medium-sized businesses adopt new digital technologies.

Industry sectors exposed to digitalization have a greater risk of market concentration, which adversely impacts competition.

Digitalization has unquestionably been shaping market dynamics, but the fundamental principles of competition law continue to apply. Mergers are reviewed to ensure they do not harm competition, and abusive conduct by dominant firms can be subject to remedial orders. In May 2019, at the time of the launch of the Digital Charter, the Minister of Innovation, Science and Industry wrote to the Commissioner of Competition, requesting that officials be assigned to work on reviewing Canadian competition law and policy to ensure that it remains suited for the modern digital economy. This work is underway, and any future proposals will aim to ensure that consumers and businesses continue to benefit from competition law in a digital world.

As noted above, this section aims to provide a sense of the general categories of comments that were not addressed through this Review. The list of examples above is however not exhaustive.

Moreover, while the COVID-19 pandemic has provided an opportunity to accelerate digitalization in the regulatory space, it has also shifted stakeholder circumstances and priorities, introducing new regulatory challenges. Outreach with federal regulators on further opportunities to support regulatory modernization and responsiveness to stakeholders is encouraged.

6.0 Related links

Date modified:: 2021-06-21

Targeted Regulatory Review: Digitalization and Technology-Neutral Regulations Roadmap

On this page

Introduction

1. Context on the Digitalization and Technology-Neutral Regulations Review

1.1 Overview

1.2 Regulatory framework

1.3 Government organizations involved

2.0 Consultations

3.0 Regulatory modernization activities

Canada Border Services Agency

Canada Revenue Agency

Canadian Food Inspection Agency

Employment and Social Development Canada

Environment and Climate Change Canada

Health Canada

Immigration, Refugees and Citizenship Canada

Innovation, Science and Economic Development Canada

Natural Resources Canada

Transport Canada

4.0 Digitalization and Technology-Neutral Regulations Roadmap initiatives

Theme 1: Making requirements less prescriptive and more flexible

Enabling electronic signatures on tax forms

Improving regulatory agility in international waste management

Removing place-based application barriers to immigration

Removing paper-based requirements in Measurement Canada's regulations

Enabling assessment of individual debtors by videoconference

Enabling use of e-signatures for handling estate trust funds

Theme 2: Using digital tools to improve interactions with the federal government on regulatory matters

Modernizing CBSA accounting processes for commercial importers

Modernizing regulatory design, implementation, and evaluation at ECCC

Modernizing the Citizenship Program

Modernizing CFIA inspection tools

Theme 3: Using digital tools to improve how the federal government manages data

Modernizing Immigration, Refugees and Citizenship Canada's information-sharing legal framework

Streamlining regulatory review of mining projects

Digitalization of the Pre-Load Air Cargo Targeting Program

Theme 4: Using novel approaches to promote technology neutrality and advance the use of digital tools in regulations

Easing regulatory burden through digital credentials

National Digital Trust Service Proof of Concept

Educational Approaches for Digital Credentials Pilot

Business Banking Digital Credentials Pilot

Drafting regulations in machine-readable code

Sharing product data to improve supply chain transparency

5.0 Issues not addressed

5.1 Issues covered by the first round of Targeted Regulatory Reviews

5.2 Issues outside the scope of the Digitalization and Technology- Neutral Regulations Review

5.3 Issues not being addressed for other specific reasons

6.0 Related links