What We Heard: Consultations undertaken as Part of the Transportation Sector Regulatory Review

This report provides a summary of the consultation activities, and their results, reflecting Transport Canada's 2018 Regulatory Review. The comments received from stakeholders during these consultation activities were taken into account when preparing the Transportation Sector Regulatory Review Roadmap.

This report does not describe each individual stakeholder comment received as part of Transport Canada’s Regulatory Review but rather it summarizes the regulatory barriers to innovation and investment identified by stakeholders.

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Targeted regulatory reviews

In Budget 2018 (PDF, 7.4 MB) , the Government of Canada proposed modernizing Canada's regulatory framework and supporting business innovation and investment to “make the Canadian regulatory system more agile, transparent and responsive”Footnote 1 through targeted regulatory reviews over the next three years. The first round of regulatory reviews targeted the following high-growth sectors:

  • agri-food and aquaculture;
  • health/bio-sciences; and
  • transport and infrastructure.

Budget 2019 (PDF, 5.8 MB) introduced the Regulatory Roadmaps for the three targeted sectors. They outline the plans to modernize the regulatory frameworks within these sectors and promote innovation and economic growth, while continuing to protect the environment and the health and safety of Canadians.

As part of this modernization activity, Transport Canada conducted a Transportation Sector Regulatory Review. That exercise led to the preparation of the Transportation Sector Regulatory Review Roadmap and this What We Heard report. Transport Canada’s Transportation Sector Regulatory Review Roadmap was prepared following consultations with the public and the Department’s internal and external stakeholders.

The Roadmap presents some of the activities proposed by the Department for promoting innovation and investment and addressing the issues in the transportation sector identified by stakeholders.

Consultation activities

Transport Canada has gathered feedback from industry, the Canadian public and its employees on regulatory barriers to innovation and investment in the Canadian transportation sector. This section describes the consultation activities in more detail.

Recent stakeholder comments

Since a series of modernization initiatives are already under way as part of the Department's Transformation Strategy, Transport Canada has compiled the outcomes of recent stakeholder engagement sessions and public participation reports. Comments from the following were considered:

Public participation reports were also considered as part of this exercise, including

New stakeholder comments

On July 28, 2017, the Treasury Board Secretariat published a notice in Part I of the Canada Gazette regarding Canadian Transportation Agency's Regulatory Modernization Initiative. The purpose of this notice was to obtain comments from stakeholders and the Canadian public on the Government of Canada's regulatory review process.

Transport Canada also conducted new engagement sessions with internal and external stakeholders through:

  • interdepartmental sessions on innovation in the transport network;
  • opinion polls;
  • webinars; and
  • discussion forums for stakeholders from all modes of transport.

What we heard

Transport Canada has compiled and analyzed stakeholder comments on regulatory barriers to innovation and investment to identify solutions to address the issues.

These engagement sessions provided an opportunity to gather comments from several stakeholders working in various transportation sectors, such as civil aviation, remotely piloted aircraft systems, marine transportation, automated and connected vehicles, transportation of dangerous goods, rail transportation and a number of others. These stakeholders include, among others

  • the Canada-United States Regulatory Cooperation Council;
  • federal departments and agencies;
  • small and medium enterprises; and
  • industries.

The issues identified by the stakeholders were then categorized under four (4) themes and several sub-themes in order to provide an overview of barriers to innovation and investment across the Canadian transportation system.

The following paragraphs introduce the themes and sub-themes used and provide examples of issues identified by stakeholders.

Theme 1: The need for more flexibility in the regulatory framework

Stakeholders from civil aviation, remotely piloted aircraft systems, marine transportation, and automated and connected vehicles identified a need for more flexibility in the regulatory framework to foster innovation and investment.

Prescriptive regulations provide a feeling of safety and security because their compliance process is detailed in the regulations. However, prescriptive regulations can be too rigid in a changing environment and when attempting to introduce new technologies. Regulations based on outcomes or performance (with guidance, advice and compliance tools) can promote a more flexible and innovation-friendly environment. These can enable companies to modernize their technologies and procedures and improve their operational performance.

Stakeholders identified a need to increase the flexibility of the regulatory framework, as follows

  • advising against adopting a one-size-fits-all approach when developing regulations (sub-theme 1); and
  • by calling for a modernization of the existing regulatory framework (sub-theme 2).

Sub-theme 1: Get away from the one-size-fits-all approach

Stakeholders considered that the one-size-fits-all approach on which the current regulations are based

  • generally restricts innovation and investment in new technologies;
  • undermines the regulatory flexibility that companies need to innovate and invest in technologies; and
  • does not take into consideration the payment and compliance capabilities of small and medium-sized enterprises (SMEs).

Stakeholders believed that a more flexible regulatory framework would allow for testing innovations or innovative solutions, while setting safety and security objectives to be achieved.

Sub-theme 2: Modernizing the regulations

For companies and users of emerging technologies, the prescriptive approach on which the current regulations are based has created a complex regulatory system that includes many requirements that need to be modernized.

Stakeholders believe that it is necessary to develop modern regulatory frameworks in order to

  • enable the deployment of new technologies and promote innovation-related investments;
  • facilitate lengthy and costly approval processes for innovators and investors; and
  • adapt to the rapid pace of technological change.

Stakeholders recommended modernizing existing regulations, sometimes using performance-based regulations, including in the marine, civil aviation, automated and connected vehicle (AV/VC) and remotely piloted aircraft (drones) systems sectors.

Theme 2: The need for more coordination among jurisdictions and collaboration with industry

Stakeholders from the marine, rail, road, dangerous goods and civil aviation sectors indicated a need for better coordination among the jurisdictions and greater collaboration with industry in order to stimulate innovation and investment.

Stakeholders believe that the Government of Canada should address issues related to investment and innovation by adopting measures to ensure

  • better coordination between federal departments and agencies (sub-theme 1);
  • better coordination between the different levels of government (sub-theme 2);
  • more international harmonization (sub-theme 3); and
  • greater collaboration with industry (sub-theme 4).

Sub-theme 1: Ensure better internal coordination within the Government of Canada

Stakeholders believe that better coordination between federal departments and agencies

  • would make the management of companies' transport operations more efficient; and
  • would address issues arising from silos dividing federal departments and agencies.

The stakeholders pointed out that federal departments and agencies sometimes operate independently and in silos, which creates a burden on the regulatory requirements and impacts the flow of goods through the supply chain.

For example, stakeholders in the automated and connected vehicles (AV/VC) and remotely piloted aircraft systems (drones) sectors pointed out that additional coordination and collaboration efforts should be undertaken since these technologies can cross the jurisdictions of several departments.

Sub-theme 2: Ensure better coordination amongst the municipal, provincial, territorial and federal jurisdictions

Stakeholders recommend that the Government of Canada develop a national strategy and act as a leader to

  • develop consistent and uniform regulations between different jurisdictions;
  • identify solutions to obstacles related to the lack of coordination between the various levels of government;
  • reduce the administrative burden on industry and Canadians due to a lack of coordination; and
  • to foster an integrated transportation system that ensures the continuity of the flow of goods from the point of origin to the final destination and that will positively contribute to the supply chain.

Stakeholders also stressed that the development of a regulatory framework that supports innovation and investment in Canada must involve, where appropriate

  • the federal government;
  • the provinces and territories; and
  • the municipalities.

As an example, stakeholders highlighted interprovincial road transportation. The federal government has largely delegated road transportation regulation to the provinces. As such, there are multiple regulatory frameworks and inconsistencies in the regulations of Canada’s different jurisdictions.

In the area of road transportation, stakeholders see the Canadian Free Trade Agreement (CFTA) as an opportunity to harmonize federal and provincial transportation sector regulations with respect to regulatory requirements for vehicle size and weight; the implementation of electronic logging devices (ELD) requirements; and carrier profile standards.

Among the proposed solutions, the following activities were proposed:

The stakeholders also mentioned, for example, that new technologies, such as autonomous and connected vehicles, are subject to provincial and territorial regulations since they are sometimes used on public roads.

Sub-theme 3: Ensure better international harmonization

Stakeholders noted the need to harmonize the transportation sector’s regulations with the regulatory frameworks of Canada’s trading partners and international organizations in order to foster innovation and investment.

They were in favour of the following:

  • the harmonization of transportation regulations with those of the United States, including the cross-border movement of trucks and trains in the supply chain and the deployment of connected and automated vehicles;
  • the harmonization of regulatory frameworks with those of the European Union and international organizations, including European safety standards for electric vehicles;
  • the harmonization of regulatory requirements in the maritime sector with those of the International Maritime Organization (IMO);
  • taking into consideration the work of the International Civil Aviation Organization (ICAO) for the aviation sector, including work on improving standards and processes for the transportation of dangerous goods by air, for example;
  • the creation of the Canada-U.S. Regulatory Cooperation Council; and
  • Transport Canada's participation in the Canada-U.S. Regulatory Cooperation Council.

Sub-theme 4: Strengthen collaboration with industry

Stakeholders in the emerging technologies sector across all modes of transportation are encouraging Transport Canada to work more closely with industry, particularly in the development of regulations for new technologies.

Stakeholders indicated that such collaboration would help

  • better identify and resolve innovation issues through the exchange of expertise between government and industry;
  • coordinate the pace of innovation and create an environment conducive to innovation and its commercialization; and
  • help Canadian companies gain and maintain a competitive advantage.

Theme 3: The need for clarity and certainty within the regulatory framework

Stakeholders from the sectors of remotely piloted aircraft systems, civil aviation, marine transportation, automated and connected vehicles, and road transportation expressed the need for clarity and certainty within the regulatory framework in order to foster innovation and investment.

Stakeholders indicated that the lack of regulatory clarity and certainty presents challenges because

  • the regulatory framework for the transport system is sometimes fragmented (sub-theme 1); and
  • the regulatory requirements of which they are composed may be unclear (sub-theme 2).

This can adversely affect the consistent compliance and enforcement of regulations and result in significant costs to industry.

Sub-theme 1: Rectify the fragmentation of regulatory frameworks

Stakeholders mentioned that the regulatory frameworks of the marine and civil aviation sectors need to be more consistent. According to stakeholders, the large quantity of text and regulatory provisions pose a challenge for the industry that must comply with them.

To rectify this, stakeholders recommend developing guidance tools and coordinating information on compliance measures imposed by various departments, agencies and levels of government.

Stakeholders also indicated the need to implement and publish regulatory amendments quickly after the ratification or amendment of international conventions in order to avoid fragmentation of national and international regulatory frameworks.

Sub-theme 2: Clarify the regulatory requirements

Stakeholders reported that the regulatory framework is sometimes unclear, due to vague wording and imprecise definitions in the regulations. This leads to uncertainty in the interpretation of the regulations for industry and the public.

Stakeholders from the marine, road, automated and connected vehicles and remotely piloted aircraft systems indicated that the language used in some regulations requires greater clarity to facilitate the interpretation of regulations and the adoption of new technologies in Canada.

Theme 4: The need for greater digitization of services

According to the stakeholders, it would be beneficial for all transportation sectors (including the marine and aviation sectors) for the federal government to coordinate the following with industry and consumers:

  • data collection platforms (sub-theme 1); and
  • coordinated data exchange platforms (sub-theme 2).

The stakeholders mentioned that digitization would lead to better service delivery through more efficient organization and sharing of information and data collected by federal departments.

Sub-theme 1: More effectively organize the information and data collected by federal agencies

Stakeholders mentioned that some data collected by government departments and agencies should be reorganized and shared in order to reduce the administrative burden on industry. It was recommended to

  • take data currently collected by federal entities and reformat it to make it digital;
  • develop a digital service that could facilitate permit and licence applications and other documents pertaining to compliance with an industry’s regulatory requirements; and
  • create a location on the federal government’s web pages for industry and the public who want to contact the responsible departments and report regulatory or other inconsistencies and problems.

Sub-theme 2: Create data collection and sharing platforms

Stakeholders believe that creating data collection and sharing platforms among federal departments and agencies, industry and consumers would optimize Canadian supply chains and promote innovation and investment in Canada.

Stakeholders indicated that they would like the federal government to initiate a discussion on a potential strategy for the implementation and use of data platforms.

Next steps

In response to several issues identified by stakeholders in Transport Canada's Regulatory Review consultation activities, the Department proposed solutions in the Transportation Sector Regulatory Review Roadmap. These solutions promote innovation and investment, while maintaining the protection of the environment and the health and safety of Canadians.

Some innovation and investment issues raised by the stakeholders require further analysis by the Department.

Transport Canada’s Office of Regulatory Innovation was established in April 2019 to continue the Department’s regulatory review efforts. Over the next three years, the Office will undertake a multi-modal review of the regulatory framework for the transportation sector and promote innovation and investment in Canada.

Transport Canada's Transportation Sector Regulatory Review Roadmap and the Forward Regulatory Plan will be updated over the next few years to inform industry and the Canadian public of solutions to address the issues identified by the stakeholders.