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Controlling Administrative Burden That Regulations Impose on Business: Guide for the 'One-for-One' Rule (view source)

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[[fr:Agents_libres_du_Canada]]

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<span class="plainlinks">[[Rapport annuel de 2014-2015 sur l'application de la règle du « un pour un »|Français]]</span>

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'''<big>We have archived this page and will not be updating it.</big>'''

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The rule does not apply to other instruments, such as acts of Parliament,<ref>The rule, however, applies to amendments to schedules of acts of Parliament made via the regulatory process if the amendment imposes new administrative burden costs to business.</ref> operational policy, guidance documents, departmental directives and memos, etc. When developing these instruments, departments are strongly encouraged to limit cumulative administrative burden and impose the least possible cost on business necessary to achieve the policy objective(s). The rule also does not apply to regulations that do not impose new administrative burden on business (examples are provided in Appendix B).<references />

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==Definitions==

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== Definitions==

The following terms and definitions apply to this guide:

;<nowiki>Administrative burden:</nowiki>

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:Administrative burden includes planning, collecting, processing and reporting of information, and completing forms and retaining data required by the federal government to comply with a regulation. This includes filling out licence applications and forms, as well as finding and compiling data for audits and becoming familiar with information requirements. Appendix A provides an exhaustive list of administrative burden activities captured by the rule.

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: Administrative burden includes planning, collecting, processing and reporting of information, and completing forms and retaining data required by the federal government to comply with a regulation. This includes filling out licence applications and forms, as well as finding and compiling data for audits and becoming familiar with information requirements. Appendix A provides an exhaustive list of administrative burden activities captured by the rule.

;<nowiki>Administrative burden costs:</nowiki>

:The direct increase in costs (in Canadian dollars) to business resulting from a regulatory change that increases administrative burden as assessed against the baseline scenario (also referred to as the current situation or a business-as-usual scenario). These costs relate to the change in behaviour arising directly from the regulatory change itself.

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:An entirely new, stand-alone regulation that imposes new administrative burden costs on business. An amendment to an existing regulation or a regulation amending a schedule to an act of Parliament is not considered to be a new regulation. However, it should be noted that a new regulation may include consequential amendments to existing regulations.

;<nowiki>Non-Governor in Council (GIC) regulation:</nowiki>

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:A regulation that is made by a minister or another regulatory entity without the need for approval by the <abbr>GIC</abbr>. This authority has been conferred on the minister or other regulatory entity by an act of Parliament.

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: A regulation that is made by a minister or another regulatory entity without the need for approval by the <abbr>GIC</abbr>. This authority has been conferred on the minister or other regulatory entity by an act of Parliament.

;<nowiki>OUT:</nowiki>

:There are two types of OUTs: (i) a monetized decrease in administrative burden costs from the removal or revision of an existing regulation or of existing regulations to offset the cost of INs, and (ii) the removal of a regulation following the approval of a new one that increases administrative burden costs on business. The OUT must be provided within 24 months of registration<ref>The date of registration is identified in the ''Canada Gazette'', Part II when the regulatory change is published.</ref> of the IN.

;<nowiki>Regulation:</nowiki>

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:An instrument registered as a Statutory Order and Regulation under the ''Statutory Instruments Act'' and the ''Statutory Instruments Regulations''. It includes both <abbr>GIC</abbr> and non-<abbr>GIC</abbr> regulations.

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: An instrument registered as a Statutory Order and Regulation under the ''Statutory Instruments Act'' and the ''Statutory Instruments Regulations''. It includes both <abbr>GIC</abbr> and non-<abbr>GIC</abbr> regulations.

;<nowiki>Regulatory change:</nowiki>

:A new regulation, an amendment to an existing regulation, or the removal of an existing regulation.

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:The Regulatory Cost Calculator is a standardized tool to quantify and monetize increases or decreases in administrative burden costs on business. It is based on the internationally recognized Standard Cost Model.

;<nowiki>Standard Cost Model (SCM):</nowiki>

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:A method to estimate the administrative burden costs to business resulting from information and reporting obligations included in a regulation. The <abbr>SCM</abbr> breaks down a regulation into components that can be measured. The <abbr>SCM</abbr> does not focus on the policy objectives of the regulation.

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: A method to estimate the administrative burden costs to business resulting from information and reporting obligations included in a regulation. The <abbr>SCM</abbr> breaks down a regulation into components that can be measured. The <abbr>SCM</abbr> does not focus on the policy objectives of the regulation.

;<nowiki>Triage:</nowiki>

:Triage is a process to assess the level of impact of a regulatory proposal in its development stage. It helps align the analytical requirements of the ''Cabinet Directive on Regulatory Management'' with the impact level of the proposal. Higher-impact proposals must meet more rigorous analytical requirements.

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Under Element A of the rule, regulatory changes that impose new administrative burden costs on business must be offset with an equivalent reduction in administrative burden costs from the stock of regulations. Examples of the types of changes that could be made to offset new administrative burden costs to business are provided below.

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*Modernize an existing regulation to improve its administration to reduce administrative burden on business. This could include regulatory changes such as removing specific information-keeping requirements, changing reporting timelines, allowing for the collection of information electronically, or allowing the sharing of information between government departments or other levels of government.

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* Modernize an existing regulation to improve its administration to reduce administrative burden on business. This could include regulatory changes such as removing specific information-keeping requirements, changing reporting timelines, allowing for the collection of information electronically, or allowing the sharing of information between government departments or other levels of government.

*A regulatory change that substitutes a provincial process for a federal one, thereby reducing burden on businesses because they no longer need to collect or submit information to the federal government.

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The monitoring and tracking of INs and OUTs will be done on both a department and portfolio basis to ensure that administrative burden is calculated and accounted for. Departments will need to establish mechanisms to track, monitor and report on compliance with the rule. Annual Scorecard Reports by the Treasury Board of Canada Secretariat will provide a government-wide picture of the rule's impact.

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==How the Rule Works: Governor in Council and Non-Governor in Council Regulatory Changes==

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== How the Rule Works: Governor in Council and Non-Governor in Council Regulatory Changes==

[[File:Cabtrib-lfarie01-eng.jpg|thumb|Figure 1. Overview of How the "One-for-One" Rule Works: <abbr>GIC</abbr> Regulatory Changes]]

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Once the regulatory change that imposes new administrative burden costs on business is approved by the <abbr>GIC</abbr> and registered, ministers are required to provide an equal reduction in administrative burden costs within 24 months (this is not required for OUTs).

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===Application of the Rule to Non-Governor in Council Regulatory Changes===

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===Application of the Rule to Non-Governor in Council Regulatory Changes ===

As per the ''Cabinet Directive on Regulatory Management'', the "One-for-One" Rule applies to both <abbr>GIC</abbr> and non-<abbr>GIC</abbr> regulatory changes that impose new administrative burden costs on business.

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The rule also does not apply to amendments to schedules that allow a business to enter the regulated sector (i.e., where the regulatory change allows a business to opt into the existing regulatory regime).

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*For example, if a business becomes a bank, an amendment to Schedule 1 of the ''Bank Act'' is required. The regulatory change lists the business in the schedule, and existing regulatory requirements apply only when the business decides to offer certain products or services (e.g., mortgages, insurance, credit cards, etc.). The rule would not apply in this example because the regulatory change (i.e., schedule amendment) does not impose new administrative burden costs on the business.

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* For example, if a business becomes a bank, an amendment to Schedule 1 of the ''Bank Act'' is required. The regulatory change lists the business in the schedule, and existing regulatory requirements apply only when the business decides to offer certain products or services (e.g., mortgages, insurance, credit cards, etc.). The rule would not apply in this example because the regulatory change (i.e., schedule amendment) does not impose new administrative burden costs on the business.

===Application of the Rule to Regulatory Changes That Involve Incorporation by Reference===

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In view of international agreements and obligations, departments should ensure that all measures are taken to design the international agreement to minimize administrative burden on business. If the federal government has no discretion on instrument choice or the design and administration of the regulation, it may be a non-discretionary obligation, and a carve-out from the Treasury Board (Part B) could be sought. Departments should not, however, expect regulatory changes they bring forward to be carved-out as a non-discretionary obligation if they have control over the design and administration of the regulation.

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===Application of the Rule to Regulatory Changes That Involve More Than One Minister===

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=== Application of the Rule to Regulatory Changes That Involve More Than One Minister===

In general, the minister who is accountable for or who sponsors the regulatory proposal will be assigned 100 per cent of the administrative burden costs associated with the IN or the OUT.<ref>The sponsoring minister is the minister with the statutory authority under the enabling legislation to propose the regulatory change to the <abbr>GIC</abbr> or, in the case of a non-<abbr>GIC</abbr> regulation, the minister under the enabling legislation responsible for enacting the regulatory change on his or her own authority.</ref> In situations where the regulatory change involves more than one minister, the following approach will be used to assign INs and OUTs. As a rule, the splitting of administrative burden between two or more ministers will not be allowed.

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The rule also provides carve-outs for two additional types of regulatory changes:

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#Regulations that implement non-discretionary obligations: This exemption applies to regulations that implement obligations for which there is no discretion with regard to the manner in which they can be designed and administered. Examples of regulations that fall within this carve-out could include United Nation Security Council Resolutions or Supreme Court of Canada decisions.

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# Regulations that implement non-discretionary obligations: This exemption applies to regulations that implement obligations for which there is no discretion with regard to the manner in which they can be designed and administered. Examples of regulations that fall within this carve-out could include United Nation Security Council Resolutions or Supreme Court of Canada decisions.

#Emergencies and crisis situations or other unique, exceptional circumstances as determined by the Treasury Board (Part B): This exemption applies to regulations that address emergencies or crisis situations or to other unique, exceptional circumstances as determined by the Treasury Board (Part B), including, for example, to protect the health, safety or security of Canadians, the environment or the economy.

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For this reason, departments must include their assumptions associated with the monetization or valuation of INs and OUTs in the publicly available Regulatory Impact Analysis Statement and in the completed Regulatory Cost Calculator sent to the Regulatory Affairs Sector of the Treasury Board of Canada Secretariat.

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====Valuation of INs and OUTs====

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====Valuation of INs and OUTs ====

To ensure a consistent approach across government, departments are required to use the following parameters for the valuation of INs and OUTs.

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#Ten-year forecast period: Departments are required to use a 10-year forecast period for the valuation of INs and OUTs. This is consistent with existing Treasury Board of Canada Secretariat guidance where regulatory costs and benefits are estimated on a minimum 10 year forecast.

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# Ten-year forecast period: Departments are required to use a 10-year forecast period for the valuation of INs and OUTs. This is consistent with existing Treasury Board of Canada Secretariat guidance where regulatory costs and benefits are estimated on a minimum 10 year forecast.

#*This 10-year forecast will begin in the year the IN will come into force or, in the case of an OUT, when it will be removed.

#Price base year: The price base year for the valuation of INs and OUTs is 2012 (all valuations must be presented in constant dollar 2012 prices).

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Departments must include the following information in the Regulatory Impact Analysis Statement:

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*A statement as to whether the rule applies to the regulatory change;

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* A statement as to whether the rule applies to the regulatory change;

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*A summary of the administrative burden costs of INs or OUTs, and the assumptions associated with the monetization must be included in the "One-for-One" section of the Regulatory Impact Analysis Statement templates.

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* A summary of the administrative burden costs of INs or OUTs, and the assumptions associated with the monetization must be included in the "One-for-One" section of the Regulatory Impact Analysis Statement templates.

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**The completed Regulatory Cost Calculators must be sent to the Regulatory Affairs Sector of the Treasury Board of Canada Secretariat; and

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** The completed Regulatory Cost Calculators must be sent to the Regulatory Affairs Sector of the Treasury Board of Canada Secretariat; and

*Consultation activities, including stakeholder and Canadians' feedback on the department's estimates of administrative burden costs or savings to business.

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The template must be included for all submissions for which the rule applies (<abbr>GIC</abbr> and non-<abbr>GIC</abbr>). The template will facilitate the tracking and monitoring of INs, OUTs, and reconciliations by departments and the Treasury Board of Canada Secretariat.

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==Monitoring, Reporting and Accountability==

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==Monitoring, Reporting and Accountability ==

===Monitoring and Tracking INs and OUTs===

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To ensure compliance with the reconciliation time frame, the Regulatory Affairs Sector of the Treasury Board of Canada Secretariat will provide updates to departments on their INs and OUTs (as required), and highlight any proposals that have not yet been reconciled and the date by which reconciliation must occur.

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===Annual Scorecard Reporting===

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=== Annual Scorecard Reporting===

The President of the Treasury Board will issue Annual Scorecard Reports on the implementation of all the regulatory management reforms described in section 7 of the ''Cabinet Directive on Regulatory Management'', including the rule's implementation, beginning in fall 2013.

The Regulatory Affairs Sector of the Treasury Board of Canada Secretariat will draft the annual report, brief the Treasury Board (Part B) on its content before its release, and seek approval from the President of the Treasury Board for its release. The report will be published on the Treasury Board of Canada Secretariat's website and be made available to the public to convey the government-wide impact of the rule's implementation.

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===Non-Compliance With the Reconciliation Time Frame===

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=== Non-Compliance With the Reconciliation Time Frame===

Should a minister be unable to offset a <abbr>GIC</abbr> or non-<abbr>GIC</abbr> IN within the two-year period, the following steps will be taken:

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#The Regulatory Affairs Sector of the Treasury Board of Canada Secretariat will work with the department to ascertain why reconciliation has not occurred and what steps are being taken to ensure reconciliation.

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# The Regulatory Affairs Sector of the Treasury Board of Canada Secretariat will work with the department to ascertain why reconciliation has not occurred and what steps are being taken to ensure reconciliation.

#*The Treasury Board of Canada Secretariat will brief the Treasury Board (Part B) on the activities to be undertaken by the department to ensure full reconciliation.

#If the minister remains non-compliant with the rule, the minister may be asked to appear before the Treasury Board (Part B) to provide an explanation of efforts to ensure reconciliation.

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==Roles and Responsibilities==

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===Treasury Board (Part B)===

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=== Treasury Board (Part B)===

The Treasury Board (Part B) is responsible for overseeing the implementation of the "One-for-One" Rule. This includes ensuring the integrity of the rule, its effective implementation across the government, determining the application of the rule to regulatory changes, applying carve-outs, verifying the proper application of the rule to non-<abbr>GIC</abbr> regulatory changes and addressing situations of non-compliance.

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Sponsoring ministers are responsible for complying with the requirements of this guide. They are also responsible for ensuring that reconciliation of INs and OUTs occurs within the required time frame.

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===Treasury Board of Canada Secretariat===

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===Treasury Board of Canada Secretariat ===

The Regulatory Affairs Sector of the Treasury Board of Canada Secretariat will work with departments to determine whether the rule applies to a <abbr>GIC</abbr> regulatory proposal as per section 8.1 and provide advice on the application of carve-outs as per section 9. The Regulatory Affairs Sector will also assist departments with applying the rule to non-<abbr>GIC</abbr> regulations and verifying non-<abbr>GIC</abbr> OUTs as per section 8.2.

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With regard to non-<abbr>GIC</abbr> regulatory changes, departments are required to engage the Treasury Board of Canada Secretariat to discuss the application of the rule to these types of regulatory changes if there are administrative burden impacts on business. Departments are also required to seek verification from the Treasury Board of Canada Secretariat's to obtain credit for non-<abbr>GIC</abbr> OUTs.

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===Privy Council Office===

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=== Privy Council Office===

Through the ''Statutory Instruments Act'', Parliament established formalities for the process of creating rules of law through regulations and assigned specific responsibilities to the Clerk of the Privy Council. The Assistant Clerk of the Privy Council and the Orders in Council Division provide advice and support to the Clerk on a range of activities relating to the use and management of Orders in Council, regulations and other statutory instruments.

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#Returning and reporting or submitting information: In cases where compliance with an information obligation requires the submission of information on the business, the information must be sent to the federal government.

#Authorizations: Completing an application seeking permission for or exemption from the federal government from activities, including applications for authorization to carry out activities. In general, this does not include pre-market approval processes (e.g., pharmaceuticals, medical devices, pesticides, telecommunication devices and other goods) because the costs associated with these processes are generally considered to be compliance costs.

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#Notification of activities: This relates to businesses having to notify the federal government of activities.

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# Notification of activities: This relates to businesses having to notify the federal government of activities.

#Familiarization with the information obligation: The resources spent by businesses to familiarize themselves with a given federal government information obligation. This would apply only to regulatory changes that represent a strong deviation from current practice.

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#Information retrieval: Retrieving the relevant figures and information needed to comply with a given federal government information obligation.

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# Information retrieval: Retrieving the relevant figures and information needed to comply with a given federal government information obligation.

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#Calculation, assessment and checking: Performing the necessary calculations, assessment of information and checking of calculated figures to ensure that the information is accurate.

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# Calculation, assessment and checking: Performing the necessary calculations, assessment of information and checking of calculated figures to ensure that the information is accurate.

#Meetings: Includes meetings held internally between the various personnel groups involved in complying with the information obligation. Also includes external meetings held in cases where compliance with the information obligation requires meetings with an auditor, lawyer or the like.

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#Copying, distribution, filing, etc.: In some cases, the report is copied, distributed or filed in order to comply with a federal government obligation.

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# Copying, distribution, filing, etc.: In some cases, the report is copied, distributed or filed in order to comply with a federal government obligation.

#Enforcement, audits and inspections: This relates to informing and assisting federal government inspectors who carry out inspections of and auditing work for a business, or who visit a business in connection with enforcement of a regulation. This should be calculated only if the requirements (e.g., number of inspections per year) are included in the regulation.

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*Changes that extend the coming-into-force date of the regulation.

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==Appendix C: Example of Valuation of INs and OUTs Under the Rule==

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== Appendix C: Example of Valuation of INs and OUTs Under the Rule ==

The following illustrates the process that departments must follow to value INs or OUTs associated with regulatory changes captured by the "One-for-One" Rule.<ref>For more information regarding the estimation of incremental impacts resulting from a regulatory change, refer to the Canadian Cost-Benefit Analysis Guide: Regulatory Proposals.</ref> In the example below, a regulatory change that imposes new administrative burden on business comes into force in 2014 (i.e., an IN). The same process must be used for OUTs.

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!Year

!2014

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!2015

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! 2015

!2016

−

!2017

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! 2017

!2018

!2019

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|IN (new administrative burden cost)

|$11,500

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|$760

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| $760

|$550

|$440

|$460

|$480

−

|$500

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| $500

|$520

|$540

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{| class="wikitable"

|+

−

!Year

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! Year

!2014

!2015

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|$442

|$461

−

|$480

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| $480

−

|$499

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| $499

|$518

−

|$538

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| $538

|-

| colspan="11" |Note that these are undiscounted values that have been converted to constant year 2012 dollars.

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!Year

!2012

−

!2013

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! 2013

!2014

!2015

−

!2016

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! 2016

−

!2017

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! 2017

!2018

!2019

!2020

!2021

−

!2022

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! 2022

!2023

|-

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|$442

|$461

−

|$480

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| $480

|$499

|$518

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{| class="wikitable"

!Year

−

!2012

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! 2012

!2013

!2014

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|1

|2

−

|3

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| 3

|4

−

|5

+

| 5

|6

|7

−

|8

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| 8

|9

|10

−

|11

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| 11

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|12

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| 12

|-

−

!Discount factor

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! Discount factor

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|0.935

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| 0.935

|0.873

|0.816

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* Non-discretionary obligation

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* Tax or tax administration

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*Tax or tax administration

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* Emergency or crisis or other unique, exceptional circumstance

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*Emergency or crisis or other unique, exceptional circumstance

Provide the rationale for the carve-out:

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|}

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== Notes ==

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==Notes==

Nancy.luo

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Changes

Controlling Administrative Burden That Regulations Impose on Business: Guide for the 'One-for-One' Rule (view source)

Revision as of 10:58, 19 August 2021

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