In 1995, the federal government proposed a Bill (C-62) known as The Regulatory Efficiency Act. Bill C-62 was overwhelmingly criticized and subsequently died on the Order Paper when the session of parliament ended. Critics decried the Bill as going against the founding principles of the Western State, and, interestingly, especially for undermining the Rule of Law. This attack is particularly remarkable in that the Rule of Law is hardly a well known or popularly understood part of Canadian cultural mores. Thus the critics often had to define what they were protecting, while simultaneously disparaging the Bill for attacking it. While there were many criticisms of Bill C-62 on a myriad of grounds, this paper will examine primarily the criticism of the proposed Regulatory Efficiency Act that may illuminate the current Canadian concept of the Rule of Law. I will also discuss whether the Bill itself might have been amended to better take into account the principles inherent in the Rule of Law.
Before seeking a contemporary Canadian definition of the Rule of Law, it is important to discuss its origins. Professor A.V. Dicey was one of the first to attempt to define the Rule of Law. He considered it to have three essential meanings: the supremacy of law over arbitrary powers, equality before the law, and the constitution being the result of the ordinary law of the land.(1)
Dicey also characterized the legislature of his day as embodying the "rule of Arbitrariness"(2)
rather than the Rule of Law. More recent theoreticians (among whom, the drafters of the Canadian Constitution Act, 1982) have broadened the conception of Rule of Law to guide both the legislative and the judicial branches of the state. This more modern conception of the Rule of Law is seen in the criticisms of Bill C-62.
T.J.Weiler, in a rare example of constructive criticism, categorized Bill C-62 as "just a process-oriented bill designed to improve the way in which Canada regulates risk."(3)
The Regulatory Efficiency Act was intended to make it easier to achieve regulatory goals by setting up a system of non legislative, but nevertheless legally binding rules and moving the power to create these into the hands of designated agencies. Had Bill C-62 come into effect, any corporation or industry group desiring regulatory change would have been responsible for proposing its own "compliance plan" to the appointed regulator. This plan would then be vetted by the regulating agency, and, once finalized, would then become law. Weiler goes on to describe the function of the controversial "compliance plans" as follows:
Compliance plans -- the meat of the bill -- would be proposed by a regulated party in order to vary the prescriptive details of an existing, designated regulation. In this way, the regulation and its purpose -- some form of risk reduction -- remain of general application, but the means of compliance would be varied to suit different regulatory environments. Presented with a proposed compliance plan, the regulator would be under a duty to listen to and consider the party's ideas for an alternative to the existing regulation. Rather than claiming that its hands were tied; that "the law applies equally to everybody;" or asking the regulated party to wait two or more years until the next review of regulations in that area, the regulator would have to act.(4)
When described this way, it is hard to see why Bill C-62 was reviled as "a repugnant assault on the rule of law."(5)
It seems that while Weiler sees the equal application of the law as a bureaucratic excuse to avoid making legislative or regulatory change, Michael Valpy, Brian Pannell, and the lawyers on the Secretariat of the Standing Joint Committee for the Scrutiny of Regulations (SSJCSR) all disagree.
In Michael Valpy's reading of the Regulatory Efficiency Act it
would permit the federal government to exempt businesses and individuals from regulations... [The Bill] would allow them to obtain the privilege of not being bound by the law that applies to everyone else.(6)
Valpy seems to believe that this in itself would be a new and heinous situation. Yet the government(7)
has a history of passing bills like The K.V.P. Company Limited Act, 1950,(8)
which clearly gives K.V.P. the privilege of not being bound by normal laws. What then is new about Bill C-62? Part of the problem with the "compliance plans" is that "Instead of providing efficiency, compliance plans will add a whole new level of complexity to Canada's laws. When the number of these special deals begin to multiply, the notion of one law for all will shrivel."(9)
This would indicate that Pannell believes it is not the quality of the exceptions set up by "compliance plans" but the quantity of those plans that would be problematic.
The Secretariat of the Standing Joint Committee for the Scrutiny of Regulations presents a clearer analysis of the equality principle inherent in the Rule of Law and how Bill C-62 might impact on that principle. They too invoke quantity of regulation but they extend the argument further:
If anything, the Bill consecrates "inequality" as an operating rule of government. It contemplates a system under which there may eventually be as many different rules as there were persons initially subject to a particular regulation. ... To describe such a system as one that respects the principle of equality before the law strains credulity. It will no doubt be said that the Bill respects the principle of equality insofar as it gives every person an equal opportunity to seek a dispensation. ... one has to turn a blind eye to practical realities to believe that this "equality of opportunity" is anything other than theoretical. Those with greater financial resources and know-how will almost certainly have a better opportunity to obtain approval of a compliance plan.(10)
Unlike other forms of regulation, which tend to arise from larger public policy issues, "compliance plans" are initiated by those who benefit directly from them. This provides a great incentive to, and makes it easier for, those who have financial power to ensure that existing regulations be unfairly applied in their favour.
The question then arises as to who accepts or rejects the proposed "compliance plans," and whether they have the power and integrity to withstand such financial (or other) pressures. Criticism of the delegation of regulatory power to designated bureaucrats is partially based on questions of their likelihood to administer fairly, and partially on whether it is even legal for the legislature to grant such powers of regulatory dispensation.(11)
It is clear from this argument that the Rule of Law contains an expectation of fair and impartial administration of regulations.
The SSJCSR does not limit their condemnation of Bill C-62 to the "equality principle" of the Rule of Law. They also state that the Bill is inconsistent with the Rule of Law on a grander scale:
It would put in place a system whereby governmental authorities have an uncontrolled and unreviewable discretion to set aside the law in particular instances and substitute for it a private agreement that is not legislative in nature but that would nevertheless be made binding on persons who are not parties to it. ... citizens could be convicted and fined or imprisoned, not because they disobeyed a law, but because they disobeyed a private agreement between a designated regulatory authority and their employer.(12)
This leads to other Rule of Law criticisms of Bill C-62: that there would be no legislative accountability for rules or "compliance plans" passed by these designated regulators and that it would be possible for the designated bureaucrats to negotiate deals on "compliance plans" in secret. If the plan was held to contain information regarding trade secrets, then the plan itself would have been held secret. Having already made sure that the "compliance plans" were neither general nor equal, the secrecy provision takes direct aim at the certainty(13)
of law. If it is impossible to find out what the applicable rules are, how can people be expected to follow them?
Responding to such criticism, proposed amendments(14)
to the Bill removed the secrecy provisions(15)
and suggested "making the compliance plans subject to approval by Parliamentary Committees..."(16)
These amendments were deemed insufficient to rehabilitate Bill C-62. The removal of the secrecy provisions was a step towards making the Bill compatible with the Rule of Law, though it did not address issues of equality or generality. The requirement for approval by Parliamentary Committee did not, however, solve the problem of legality and the power of dispensation. Critics, including the SSJCSR, Michelle Swenarchuk, Bill Andrews,(17)
and Brian Pannell, contended that the Bill could not be sufficiently amended. In their view, any changes vast enough to bring Bill C-62 in line with the Rule of Law would be more work than drafting a new Bill.
The basic problem with attempting to reconcile the Bill with the Rule of Law is that, per definition, setting up regulatory exemptions makes for an inequality in the application of those regulations. Only somewhere between antithesis and paradox could a Bill simultaneously uphold the principle that rules must be applied equally and to all; while asserting that some rules must be applied differently to some.
Clearly, there were problems with Bill C-62 far beyond its irreconcilability with the Rule of Law. The Report on Bill C-62 mentions many of these, including the possibility that the Bill itself was illegal either by attempting to revive the power of dispensation (declared illegal by the 1689 Bill of Rights), or just by being too vague to be applied.
As described by the critics of the Regulatory Efficiency Act, the Rule of Law mandates that "the rights and liberties of the citizen can only be restriced by means of laws that bind the Crown as well as the subject and whose interpretation is the responsibility of the judiciary."(18)
The Rule of Law also implies that the lawmakers should not "have an unfettered discretion to decide when and to whom a law applies or the discretionary power to enact a law for one citizen and a different one for his neighbour..."(19)
There seems to be a clear consensus among Canadians that the above are included in the Rule of Law, and that Bill C-62 contravened them. With all the attention being paid to the failings of Bill C-62, however, one important question does not seem to have been asked: Is the current regulatory system any better at complying with the high standards inherent in the Rule of Law?
1. Wade and Bradley, Consitutional and Administrative Law, 10th ed. (1985) [As cited in the CML 1104 casebook, pp. 30-31.]
2. McLachlan, "Rules and Discretion in the Governance of Canada" (1992), 56 Sask. L. Rev. 167. [As cited in the CML 1104 casebook, p. 21.]
3. Weiler, Todd Jeffrey, "The Straight Goods on Federal Regulatory Reform," (1995) Government Information in Canada/Information gouvernementale au Canada, Vol. 2, no. 2.3 (fall). <URL: http://www.usask.ca/library/gic/v2n2/weiler.html>
4. ibid.
5. Valpy, Michael, "Bill C-62: a repugnant assault on the rule of law," (1995) The Globe and Mail, Friday, April 28.
6. ibid.
7. In this instance the government of Ontario.
8. The K.V.P. Company Limited Act, 1950, (Ont.) c. 33. [As cited in the CML 1104 casebook, p. 81.]
9. Pannell, Brian, "Anti-Regulation Bill will Lull Public's Watchman to Sleep" (1995) Government Information in Canada/Information governementale au Canada, Vol. 2, 1.2 (summer). Reprinted with permission from Toronto Star, 13 April 1995, p. A29.
10. Secretariat of the Standing Joint Committee for the Scrutiny of Regulations, (1995) Report on Bill C-62. p. 7.
11. ibid., p. 4.
12. ibid., p. 6.
13. McLachllin, opcit.
14. Swenarchuk, Michelle, "Treasury Board Amendments to Bill C-62, the Regulatory Efficiency Act." (1995) Intervenor, May/June. [Note: photocopy on reserve does not have complete citation information.]
15. Regulatory Efficiency Act, Bill C-62, s. 14(b). [It is not clear whether s. 14(b) was also removed, so that the Bill may still have included an option for keeping the information in a "compliance plan" secret. Weile opines that the entire s. 14 would be removed, based on his conversations with the Treasury Board Secretariat officials (see Weile, endnote 11). Swenarchuk (see Swenarchuk, p. 4) seems to indicate that only one part of s. 14 was being removed, however, she also seems to have section numbers that do not correspond at all with the text of the act, which somewhat diminishes her credibility.]
16. Geddes, John, "The law that would cut red tape." (1995) The Financial Post, June 3, p. 3.
17. Andrews, Bill, "Making a bad Bill worse," (1995) WCEL NEWS, Vol. 18, no. 11, published by the West Coast Environmental Law Research Foundation.
18. Secretariat of the Standing Joint Committee for the Scrutiny of Regulations, (1995) Report on Bill C-62. p. 6.
19. ibid., pp. 6-7