Cabinet Directive on Regulatory Competitiveness and Red Tape Reduction
This Cabinet Directive will take effect on December 31, 2026, and will replace the Cabinet Directive on Regulation.
1. Objective and results
The objective of this directive is to advance a world-class regulatory system that protects the public interest while providing the efficiency and clarity needed for Canada to attract investment, support innovation and strengthen Canada’s long-term competitiveness in a rapidly evolving global economy.
The expected results of this directive are as follows:
1.1 Canada’s regulatory system strengthens the country’s competitiveness by enabling investment, innovation and economic growth while safeguarding the health, safety, security, social and economic well-being of Canadians, as well as the environment;
1.2 Regulations are evidence-informed, proportionate and outcome-focused, achieving intended results while minimizing unnecessary regulatory burden and friction; and
1.3 Regulations are part of a trusted, modern regulatory framework that provides strong protections for Canadians, respects the rights and considers the interests of Indigenous Peoples, and remains effective, responsive and fit for purpose.
2. Scope of application
2.1 This directive applies to any regulations that are or will be registered as such under section 6 of the Statutory Instruments Act, made by or with the approval of the Governor in Council, the Treasury Board or a minister of the Crown. Regulation-making authorities in respect of all other regulations are strongly encouraged to follow and apply this directive.
2.2 Exemptions, in part or in whole, may be provided by Cabinet, or the Treasury Board (Governor in Council), or the relevant regulation-making authority. Departments and agencies must consult with the Regulatory Affairs Sector at the Treasury Board of Canada Secretariat if they are considering seeking an exemption.
2.3 This directive is subject to applicable statutes, regulations and other government-wide policy instruments and international agreements. It does not alter authorities or fetter discretionary powers set out in those instruments, other Cabinet directives or other horizontal government requirements.
3. Priority actions for red tape reduction
Regulators will seek to enable greater reductions in regulatory burden and costs to support competition, in part through the following actions:
3.1 Use regulations only when required to achieve a desired public interest goal and justify them with a clear rationale for protecting the health, safety, security, social and economic well-being of Canadians, as well as the environment that considers risk, impact and cost;
3.2 Undertake and communicate the results of a dedicated assessment of competitiveness impacts for proposed regulatory measures;
3.3 Offset $2 for every $1 increase in regulatory burden on business over a three-year period, as defined by the Treasury Board of Canada Secretariat;
3.4 Support inter-jurisdictional alignment by considering and, where appropriate, adopting by default standards developed by recognized standards development organizations or public bodies; where supported by evidence and warranted in the public interest, international standards may be adapted for the Canadian context;
3.5 Review significant impact regulatory measures, as defined by the Treasury Board of Canada Secretariat, within five years of their coming into force and all other regulations at least once every 10 years to:
- ensure that regulatory measures are working as intended;
- mitigate unintended impacts (for example, barriers to trade or innovation); and
- identify new opportunities to reduce red tape for regulated parties
3.6 Remove outdated, inactive or no longer in effect regulations as quickly as possible, while taking into account regulators’ mandates.
4. Key regulatory principles
Regulators should adhere to the following principles when developing, amending, implementing and reviewing regulations, related policies and guidance, and regulatory regimes. These principles are key to an effective, agile and trusted regulatory system that protects the health, safety, security, social and economic well-being of Canadians, as well as the environment and continues to respect the rights and interests of Indigenous Peoples.
4.1 Regulations advance the public-interest while supporting economic growth, competitiveness and innovation through clear, effective, and predictable regulatory frameworks. Regulators will:
4.1.1 Enable regulatory intervention that is proportionate to the identified level of risk for an issue and that encourages compliance, including through appropriate monitoring and enforcement activities;
4.1.2 Design, implement and maintain up-to-date regulations that advance interoperability and administrative efficiency across jurisdictions through regulatory cooperation and alignment; and
4.1.3 Write regulations and policies so they remain clear and effective over time so as to account for technological innovation.
4.2 Regulations are proportionate and fit for purpose. Regulators will:
4.2.1 Consider the full range of policy instruments and non-regulatory approaches early in the policy development process;
4.2.2 Base regulatory proposals and decisions on:
- a regulatory impact analysis that is proportional to the anticipated costs, benefits and level of risk associated with a regulatory action or inaction; and
- consideration of impacts on competitiveness and diverse groups of Canadians
4.2.3 Ensure that regulations achieve their intended outcomes over time while minimizing regulatory burden.
4.3 Regulations are made in a manner that is open to public scrutiny, outcome-focused, risk-based and evidence-informed. Regulators will:
4.3.1 Engage with Canadians, Indigenous Peoples, business and stakeholders in a manner that upholds transparency and public trust and that is proportionate to the impacts of regulatory measures;
4.3.2 Focus on achieving intended outcomes of both regulations and regulatory regimes; and
4.3.3 For all significant impact regulations, either:
- must pre-publish in the Canada Gazette, Part I, with approval from the Treasury Board (Governor in Council) or relevant decision-making authority; or
- request an exemption from pre-publication, where appropriate, from the Treasury Board (Governor in Council) or relevant decision-making authority.
4.4 Regulatory regimes are predictable, administered efficiently and are easy to navigate. Regulators will:
4.4.1 Ensure regulations and regulatory regimes are easy to navigate and understandable to regulated parties and the public;
4.4.2 Coordinate with other regulators and jurisdictions to reduce regulatory overlap and improve implementation outcomes;
4.4.3 Provide clear information to regulated parties, when applicable, on how regulations and regulatory regimes enable them to innovate and safely introduce new products, services, processes and technologies to their business or to the market; and
4.4.4 Develop streamlined, timely and accurate public reporting and forward regulatory planning, including digital tools for efficiency and ease of participation in regulatory regimes.
4.5 Regulations and regulation-making processes must comply with all applicable obligations to Indigenous Peoples, recognizing distinctions among First Nations, Inuit and Métis and respecting their rights, customs and governance structures. The obligations include but are not limited to those arising from the following:
4.5.1 The legal duty to consult and, where appropriate, accommodate Indigenous groups;
4.5.2 The United Nations Declaration on the Rights of Indigenous Peoples Act;
4.5.3 Modern treaties, self-government agreements, historic treaties and other relevant legally binding agreements with Indigenous Peoples; and
4.5.4 Policy requirements, including the Cabinet Directive on the Implementation of the Inuit Nunangat Policy, the Cabinet Directive on the Federal Approach to Modern Treaty Implementation and other applicable Treasury Board, Cabinet, or government-wide directives and policies.
5. Roles and responsibilities
Regulators and the Treasury Board of Canada Secretariat work collaboratively to maintain the federal regulatory system.
5.1 Regulators are responsible for ensuring quality and timely regulatory work in accordance with their respective mandates, authorities and portfolios, for which they will:
5.1.1 Ensure they are aware of, understand and comply with this directive when developing, amending, implementing and reviewing regulations;
5.1.2 Follow Treasury Board of Canada Secretariat policies and guidance;
5.1.3 Ensure that findings from required assessments are appropriately reflected in regulatory proposals, in a manner proportionate to the nature, scope and anticipated impact of the regulatory measure;
5.1.4 Make decisions on how to consult on regulatory proposals, in accordance with legislative requirements and international obligations; and
5.1.5 Report their results toward achieving the objective of this directive as directed by the Treasury Board of Canada Secretariat.
5.2 The Treasury Board of Canada Secretariat is responsible for regulatory system oversight and supporting Treasury Board (Governor in Council) decision-making, regulators and regulation-making authorities, for which it will:
5.2.1 Advise the Treasury Board (Governor in Council) in its decision-making role as the Special Committee of Council for Governor in Council submissions;
5.2.2. Exercise any power, duty or function delegated by the President of the Treasury Board, subject to any terms and conditions established by the President;
5.2.3 Establish policies, guidance, tools and processes over the regulatory lifecycle on any aspect of this directive;
5.2.4 Provide regulators with timely expert policy and technical guidance, training, and interdepartmental coordination to support and monitor implementation of this directive;
5.2.5 Support and advise regulators early in the legislative and regulatory proposal development process, as appropriate, to:
- support problem definition;
- assess non-regulatory, regulatory or legislative options; and
- obtain such advice, as appropriate, before a preferred regulatory approach is advanced;
5.2.6 Review proposals and advise regulators on the quality of regulatory analysis, and whether the expectations set out in this directive have not been met; and
5.2.7 Support regulatory innovation by regulators and other jurisdictions.
6. Coming into force
This directive comes into force on December 31, 2026 and replaces the 2018 Cabinet Directive on Regulation.