What is Regulatory Experimentation?

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What is Regulatory Experimentation? Experimentation can mean different things to different people. At its loosest, an ‘experiment’ is sometimes used to mean ‘trying out something new,’ while stricter definitions require very specific criteria. The Centre for Regulatory Innovation’s (CRI) focus is on regulatory experimentation. Our definition is: A regulatory experiment is a test or trial of a new product, service, approach or process designed to generate evidence or information that can inform the design or administration of a regulatory regime.

Examples of Regulatory Experiments A Regulated Product or Service Testing new products, services, or business models that create regulatory uncertainty. Experiments can help understand real-world implications and assess how to regulate them effectively. A New Approach to Regulating Trialling a new regulation under controlled conditions to monitor its effects before full implementation, allowing regulators to test proposed rules with specific groups to assess their effectiveness. A Regulatory Process Testing different ways of carrying out regulatory activities, such as stakeholder consultations or new compliance and enforcement procedures, to see if they are better than current methods.

Why Experiment? The core reason to undertake regulatory experimentation is to provide high-quality evidence to inform regulatory decision making. It can be useful for several reasons: It provides a structured approach to systematically generate evidence and build a robust foundation for better regulation. It is a powerful way to test alternatives and identify better approaches to achieving regulatory objectives. It helps regulators reduce risk and uncertainty associated with a new approach before implementing it at scale. It allows for greater control and monitoring to isolate aspects of interest than is possible in a real-world setting. It can generate information in complex, changing systems where previous research may become quickly outdated. By building a stronger evidence base, it helps to build consensus around a particular regulatory option or issue.

How We Can Help The CRI’s goals include creating opportunities for regulatory experimentation and helping federal regulators embed experimental learnings into regulation. The CRI can support regulators with the design and implementation of regulatory experiments through guidance and funding available through the Regulatory Experimentation Expense Fund. For further information, please contact the CRI at: cri-cir@tbs-sct.gc.ca