Overview of the Regulatory Process

Transport Canada as a Regulator

Transport Canada (TC) manages a considerable volume of regulatory initiatives across all modes (air, marine, rail, road), and is one of the largest federal regulators.

The Minister of Transport has responsibility under 50 statutes, 18 of which are significant regulatory statutes administered primarily or exclusively by the Department. Some 236 regulations have been enacted under these 18 statutes. The majority of regulations are made under two Acts: the Aeronautics Act and the Canada Shipping Act, 2001. The Department is also responsible for the Airport Zoning Regulations for individual airports, which amounts to approximately 150 regulations.

The Canadian Regulatory System

Legislation

The Canadian regulatory system is underpinned by a legal framework (meaning the Acts, such as the Statutory Instruments Act), which establishes the required formalities, and departmental Acts, which provide the enabling authorities to create and amend regulations.

The requirements include an examination by the Department of Justice of the legality and draftsmanship of proposed regulations, registration of regulations by the Clerk of the Privy Council, publication in the Canada Gazette, and examination post publication by the Standing Joint Committee for the Scrutiny of Regulations (SJCSR).

The SJCSR comprises of Senators and Members of the House of Commons. There are two Joint Chairs, one representing the Senate one from the House of Commons. The Committee reviews only matters of legality and the procedural aspects of regulations. Once a department’s regulations have been examined, the department receives correspondence with the results of the examination and specific recommendations to address. This Committee also has the power to disallow (remove) regulations.

Cabinet Directive on Regulation

Regulations are a form of law, sometimes referred to as subordinate legislation, which define the application and enforcement of legislation. The Cabinet Directive on Regulation stems from the Treasury Board Secretariat (TBS) and is the policy framework that establishes the requirements for departments and agencies to make regulations.

The Cabinet Directive on Regulation sets out the parameters of the federal regulatory system, including a life-cycle approach to regulation, with specific requirements for all stages of the life cycle, including assessment of the regulatory impact (international obligations, health, safety, economic, social etc.), implementation, evaluation, and review of regulations.

The Regulatory Process

The following steps need to be completed for a regulation to be considered by the Treasury Board:

  • Consultations: with other federal, provincial and territorial departments and agencies, and with stakeholders.
  • Triage Statement: assessment of the impact of the regulatory change – this needs Treasury Board Secretariat approval to proceed to the following steps.
  • Regulatory Impact Analysis Statement: a document that provides detailed analysis and includes cost-benefit analysis, if needed.
  • Legal Drafting and Approval: drafting and approval (jurilinguist, constitutional assessment and editors) of the regulations by the Department of Justice. All regulatory Governor in Council submissions are delivered to the Privy Council Office (PCO) for a Treasury Board (TB) committee meeting.
  • Pre-publication in the Canada Gazette, Part I: Every Saturday, proposed regulations are published for public consultation.
  • Consultation Period: usually 30 days but can differ depending on the proposal.
  • Adjustments and revisions: Once the comments have been reviewed, the Department makes adjustments, if needed.
  • Approval by the Governor in Council: once approved, all submissions are delivered to PCO for final approval.
  • Registration and coming into force: Once approved, the regulations will be registered by PCO and will come into force either upon registration or at any other given time through an Order in Council.
  • Publication in the Canada Gazette, Part II: final publication of regulations on every second Wednesday of the month.

Other Statutory Instruments Available to Transport Canada

Regulations are perhaps the most prominent statutory instrument with respect to their scope, quantity, and visibility; however, other statutory instruments or “tools” may be relied upon by Transport Canada to require particular behaviours or outcomes – sometimes on an urgent basis in response to imminent risks (e.g. pandemic response). A description of the other tools, including the general process and examples, are provided in the Annex below.

Regulatory Modernization and Reform at Transport Canada

Transport Canada (TC) is implementing measures to better manage its regulatory footprint and apply a more strategic lens that adds greater value for travellers and stakeholders. These regulatory modernization efforts are essential to ensure that TC’s regulatory regime can support competitiveness and innovation in the transportation sector while delivering on the Department’s fundamental commitments to safety, security, efficiency and environmental responsibility.

Regulatory modernization efforts are an integral part of the Department’s Transformation Strategy, which re-defines how TC approaches policy and program development, service innovation and use of data, enabled by a modern workforce, novel approaches and technology, in a manner that increases public trust. In 2018, TC leveraged an ongoing Transformation Strategy to undertake a sector-specific regulatory review, which lead to a Transportation Sector Regulatory Review Roadmap. Budget 2019 committed $45.8 million over three years to implement this roadmap, including commercial testing of remotely-piloted aircraft systems beyond the visual line-of-sight, cooperative truck platooning pilot projects, and an enhanced road safety transfer payment program.

As part of the targeted regulatory reviews announced in 2019, TC worked closely with the Treasury Board Secretariat and a number of federal departments/agencies to lead the development of a regulatory review on international standards. Published in spring 2021, the Regulatory Roadmap on International Standards, developed by participating departments and agencies, looks at how the Government of Canada can use international standards to support regulatory cooperation, facilitate trade, and foster innovation.

Role of Treasury Board Secretariat (TBS)

TBS provides advice and makes recommendations to the Treasury Board on how the government spends money on programs and services, how it regulates, and how it is managed. The TBS supports the federal regulatory system by:

  • Providing federal regulatory policy and oversight;
  • Supporting evidence-based Governor in Council decision-making; and
  • Advancing and promoting regulatory cooperation.

TC engages TBS at the onset of the proposal to ensure that the submission meets all of the necessary requirements. Once a proposal receives TBS approval and is approved internally, regulatory proposals are delivered to PCO, which is responsible for approval by the Governor in Council. The Treasury Board meets on Thursdays when the House of Commons is sitting, and holds ad hoc meetings when needed.

Annex – Statutory Instruments Available to Transport Canada

1. Regulations (made by the Governor in Council)

Description: These regulations are made by the Governor in Council (i.e., the Governor General acting on the advice of the Cabinet as represented by the Treasury Board).

Regulations, under the Statutory Instruments Act, are statutory instruments that are established pursuant to legislative powers conferred under an act of Parliament that may result in the imposition of legal sanctions if they are contravened. Transport Canada (TC) uses regulations to mandate or enable particular behaviors or outcomes in order to achieve public policy objectives related to Canada’s transportation system.

Process Overview: TC officials develop the regulations in partnership with Department of Justice (DOJ) and Treasury Board of Canada Secretariat (TBS). The proposed regulations are generally pre-published with the permission of Treasury Board for stakeholder consultation.

Feedback is incorporated and brought to the Treasury Board to seek Governor in Council approval to make the proposed regulations.

An exemption from pre-publication may be granted by the Treasury Board for proposals that do not require consultations, bear no cost impacts or when there is no requirement to pre-publish.

Governor in Council-made regulations generally take between 6 months and up to 36 months (for highly complex regulations) to complete.

Example:

Regulations Amending the Canadian Aviation Regulations (Parts I, VI and VII — Flight Crew Member Hours of Work and Rest Periods): SOR/2018-269: The amendments to the Canadian Aviation Regulations strengthened Canada’s flight crew fatigue risk management requirements for air transport services in Canada (excluding private air operators) via enhanced prescriptive regime and an optional, more flexible Fatigue Risk Management System exemption mechanism.

2. Regulations (made by the Minister of Transport)

Description: These regulations are made by the Minister of Transport and are considered Ministerial regulations.

Regulations, under the Statutory Instruments Act, are statutory instruments that are established pursuant to legislative powers conferred under an act of Parliament that may result in the imposition of legal sanctions if they are contravened. Orders and Regulations made by the Minister of Transport in comparison to Governor in Council regulations are generally narrower in scope and highly technical in nature.

Process Overview: TC officials develop the regulations in partnership with DOJ. The proposed regulations are generally pre-published in accordance with the Cabinet Directive on Regulations. Feedback is incorporated and brought to the Minister of Transport to make the proposed regulations.

This process can take between 4 months and 12 months to complete or longer in some cases.

Example:

Regulations Amending the Schedule to the Canada Marine Act: SOR/2020-192: The Hamilton-Oshawa Port Authority, which was formed in June 2019, was not listed in the Schedule of the Canada Marine Act. Therefore, the Schedule needed to be updated, through this regulatory proposal, to add Hamilton-Oshawa Port Authority in order to ensure the accuracy of the legislation governing Canada Port Authorities.

3. Order in Council

Description: Orders in Council are made by the Governor in Council (i.e., the Governor General acting on the advice of the Cabinet as represented by the Treasury Board).

An Order in Council is a legal instrument made by the Governor in Council pursuant to a statutory authority or, less frequently, the royal prerogative. All Orders in Council are made on the recommendation of the responsible Minister of the Crown and take legal effect only when signed by the Governor General and can be used in the court of law.

Process Overview: TC officials develop the proposed Order in Council in consultation with stakeholders and TBS and in partnership with DOJ. The Minister of Transport then submits the proposed Order in Council for Governor in Council approval.

This process can take up to 4 months or more to complete.

Example:

Order Fixing the Day on Which this Order is Registered as the Day on Which Certain Provisions of that Act Come into Force: SI/2021-26: The primary purpose of this Order was to bring into force sections 70, 71 and 72 of the Transportation Modernization Act, which amended the Coasting Trade Act to allow ship owners to use vessels of any registry to reposition their owned and/or leased empty containers between locations in Canada (on a non-revenue basis) without a coasting trade licence.

4. Interim Order

Description: These Orders are made by the Minister of Transport; however, in some cases, the Minister may delegate this authority to a Deputy Minister or other senior-level TC official.

Interim orders are often used to address imminent safety or security issues related to the transportation system. They allow TC to rapidly respond to exigent circumstances.

Process Overview: TC officials develop the proposed Interim Order in consultation with stakeholders and in partnership with DOJ. The Minister of Transport has the authority to make the Order or to delegate this authority pursuant to particular ‘enabling acts’.

This process can take between a few weeks to a few months to complete. However, in some cases, the process can even be done in a matter of days, such as in the case of Interim Orders that need to be renewed every 14 days.

In some instances, extending the effective period of an Interim Order requires the approval of the Governor in Council. This can extend the process timeline by several weeks or more.

Example:

Interim Order Respecting Certain Requirements for Civil Aviation Due to COVID-19, No. 38: TC has been releasing Interim Orders on a biweekly basis to deal with COVID-19 related risks to aviation safety or the safety of the public.

5. Ministerial Order

Description: These Orders are made by the Minister of Transport or by senior-level TC officials who have been delegated the authority to do so (for example, under section 45 of the Railway Safety Act).

A Ministerial Order is an instrument created under the authority granted to the Minister, or to a person authorized by the Minister under a statute or regulation, usually referred to as the ‘enabling act’.

Process Overview: TC officials develop the proposed Ministerial Order in consultation with stakeholders and in partnership with DOJ.

Depending on their complexity and urgency, Ministerial Orders can be developed in less than 24 hours or several days depending on their urgency and complexity.

Example:

Order Pursuant to Section 32.01 of The Railway Safety Act (MO 21-06): In the interest of safe railway operations and to address the concerns regarding risks to community safety in extreme weather conditions, TC issued a Ministerial Order to strengthen safety by further protecting against wildfires in the context of extreme weather conditions.

6. Ministerial Notices related to Aviation (i.e., NOTAM)

Description: An instrument created under the authority granted to the Minister, or to a person designated by the Minister, under the Aeronautics Act.

These notices allow the Minister or any person authorized to prohibit or restrict the operation of aircraft on or over any area or within any airspace, if, in the opinion of the Minister or person, the prohibition or restriction is necessary for aviation safety or security or the protection of the public.

Process Overview: TC officials develop the proposed NOTAM to address an issue related to airspace use. TC officials then issue the NOTAM, which are posted by NavCan, to allow pilots to review any additional airspace restrictions for a particular area. This process is done fairly quickly depending on the urgency to issue the NOTAM.

Example:

NOTAM on India: Pursuant to section 5.1 of the Aeronautics Act, this Notice to Airmen (NOTAM) was issued to suspend all commercial and private passenger flights from India to help manage the elevated risk of imported cases of COVID-19 and variants of concern into Canada.