A STUDY TO CHARACTERIZE THE REGULATORY PARAMETERS DETERMINING THE COSTS OF ADMINISTRATIVE ACTIVITIES FOR REGULATED INDUSTRY IN CANADA

MANDATORY CRITERIA:

At least one member of the project team is required to have a graduate degree in economics or a graduate degree in statistics or business administration with an appropriate specialization in economics. Proof of degree must be provided upon request.

The bidding firm must demonstrate in the proposal that it has successfully carried out at least one project relating to the impacts of regulatory requirements or policies within the past five (5) years.


SECURITY:

Each resource proposed by the bidder must hold a security accreditation to the level of Reliability at the time of response to this request for proposal. In order to demonstrate this requirement, each resource must be listed, along with their clearance level and the security clearance number or a confirmation letter from the issuing department.


INTELLECTUAL PROPERTY

The Crown will own the foreground intellectual property arising from work under this contract, in accordance with the Treasury Board of Canada Policy on Title to Intellectual Property Arising under Crown Procurement Contracts, including Section 6.5 of the Policy which states that, under a Crown Procurement Contract, the Crown may own the Foreground, where the Foreground consists of material subject to copyright, with the exception of computer software and all documentation pertaining to that software.


BACKGROUND

On October 1, 2012, the Government of Canada officially launched its Red Tape Reduction Action Plan, implementing a “One-for-One” Rule and a Small Business Lens to control the amount of administrative burden that federal regulations generate. The Rule introduces a new control to the federal regulatory system, as it has been deployed to curb and control administrative burden that Canadian regulations impose on business. The purpose of the Lens is to generate better analysis of small business realities and consultation at the earliest stages of regulatory design and to consider risk-based alternate compliance approaches that minimize costs for small business. 

As a result of the “One-for-One” Rule, federal government departments will need to review and reform their existing stock of regulations on an ongoing basis so they can provide business with administrative burden relief that is equal or greater to new burden imposed by regulatory changes. If new administrative burden costs result from the introduction of an entirely new regulation, departments will be required to not only offset those new administrative burden costs via existing regulations, but also to remove a regulation from their stock of existing regulations. Further, if an amendment (a change to an existing regulation) imposes new administrative burden costs on business, departments will be required to offset an equal amount of administrative burden costs on business from their existing stock of regulations within two years.

In the course of carrying out cost-benefit analyses associated with regulatory proposals with new administrative burden costs to business (i.e., INs), departments are required to use the Regulatory Cost Calculator to monetize the costs of the proposed administrative requirements. The assessment of the new administrative burden costs on business is based on estimating the direct incremental administrative burden that businesses face as a result of the regulatory change (i.e., that they would not otherwise face as part of usual business practices). The following definitions of administrative burden and administrative burden costs apply to these terms of reference:

Administrative burden: 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 license 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 “One-for-One” Rule.

Administrative burden costs: 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. To determine the incremental increase in administrative burden costs, the proposed regulatory change must be assessed against existing requirements in guidance, policy, regulation or law, whether they are voluntary or mandatory.


OBJECTIVE

The objective of this study is to improve the determination of administrative burden that regulations place on business, through the creation of a model that will enable the federal Department of the Environment (Environment Canada) to better characterize the main regulatory parameters and drivers that determine the costs of administrative activities required by federal regulations. This work will contribute towards regulatory planning within Environment Canada, as well as towards analysis in support of Environment Canada’s Regulatory Impact Analysis Statements published in the Canada Gazette.


STATEMENT OF WORK

1.	Description of work

The Contractor will develop a model that will enable Environment Canada to make more realistic assumptions regarding the costs imposed on regulated communities in Canada as a result of administrative activities required by regulations. The Contractor will also present the analysis of that model. This model will be based on available and relevant evidence, and it will characterize the principal regulatory parameters and drivers that determine the costs of administrative activities incurred by Canadian industry.

This model will categorize and define parameters or drivers such that, given a specific regulation and a knowledge of the regulated community of interest, it will be feasible for Environment Canada to use the model to input data into the Regulatory Cost Calculator and arrive at an estimation of administrative burden costs for new regulatory proposals. Specifically, this model will characterize the factors or variables that affect the time required to perform the administrative activities listed in the methodology section below.
 
2.	Methodology

The Contractor will deliver the methodology, analysis and presentation of a model designed to reasonably estimate the administrative burden associated with proposed regulations. The model will include, but need not be limited to, the administrative activities contained in the Regulatory Cost Calculator. The administrative activities contained in the Regulatory Cost Calculator resulting in new administrative burden costs are listed below:

i.	learning about information requirements of regulated administrative activities;

ii.	application / permission (this activity relates to applications for authorization or permission to carry out activities or applications for exemption from activities);

iii.	notification (this activity relates to businesses having to notify Environment Canada of specific activities);

iv.	record keeping and reporting related to regulations;

v.	inspections and audits mandated by the regulations (informing and assisting officers who carry out inspections of or auditing work for a business, or who visit a business in connection with the enforcement of regulations); and

vi.	any other administrative activities resulting from regulations (see Appendix A for more details).

Tasks:

1.	Using information provided by Environment Canada and from other sources, through the use of spreadsheets, the Contractor will generate a model (with realistic and well-documented assumptions to be included in a supporting study) of the parameters and drivers that determine the cost of administrative activities.

a.	The model will use the definitions of administrative burden and administrative burden costs provided by the Treasury Board of Canada Secretariat in Controlling Administrative Burden That Regulations Impose on Business: Guide for the “One-for-One” Rule, and also found above in the background section of these terms of reference.
b.	The model will contain, but need not be limited to, the administrative activities contained in the Standard Cost Model and the Regulatory Cost Calculator outlined above.
c.	The modelling of the parameters or drivers will characterize the factors or variables that determine the magnitude of administrative burden costs such as, but not limited to: the size of firm; the affected occupational groups; information content; the number of pages; the amount of administrative requirements (e.g., reports); and the relative complexity of the regulations or requirements in question.
d.	The model will include estimates, founded on reasonable and evidence-based assumptions, regarding the impact of each parameter or driver on administrative activities, and it will allow Environment Canada to classify a given regulation as potentially having either a low, medium or high impact with respect to the level of administrative burden costs.

2.	The Contractor will produce a study describing the methodology of the aforementioned model, as well as the rationale and evidence-based assumptions behind the inclusion of administrative activities and parameters. This supporting study will account for how the parameters and drivers may differ owing to factors such as firm size (small; medium/large) and sector or subsector, and any other factors that may be appropriate.

Notes:

•	The final spreadsheets and supporting study will include, but will not be limited to, the information required for the tasks above.
•	The information requirements provided may not be exhaustive. The Contractor is expected to provide any additional information discovered during the course of this work that is relevant in fulfilling the objective mentioned above.
•	Use of information related to Canadian regulations should be prioritized over the use of information related to regulations of other countries. Some international statistics may be accepted depending on the availability of Canadian statistics, or if used for comparative purposes.


GENERAL INSTRUCTIONS

All documentation (either in draft or final form) shall be organized and written in a clear and logical fashion.

i.	The Contractor shall report all sources of information.

ii.	All electronic copies of reports and studies shall be provided in Microsoft Word format (version 2003 or later), and all supporting and underlying data and spreadsheets shall be provided in Microsoft Excel format (version 2003 or later).

 
DELIVERABLES

The deliverables of the work are as follows:

Deliverable 1.	The Contractor will provide the study methodology, work plan and timelines to the Departmental representative for review.

Deliverable 2.	The Contractor will provide to the Departmental representative for review a draft version of the model and supporting study, following the methodology, work plan and timelines specified in Deliverable 1, as amended during the review process.

Deliverable 3.	The Contractor will provide to the Departmental representative the final version of the model and supporting study, which will be based on the draft version, as amended during the review process.

Deliverable 4.	The Contractor will provide on-going support, as defined below, to the Departmental representative for the duration of this contract.

The Contractor will be responsible for the delivery of all the deliverables outlined above to the Departmental representative. In addition to the draft and final versions of the model and supporting study, the Contractor will provide the Departmental representative, upon request, with hard and electronic copies (in Microsoft Word and Excel formats, version 2003 or later) of all notes, text, graphics, surveys, raw data and spreadsheets used for the delivery of this contract.

All deliverables shall be provided 13 weeks after the first day of contract or no later than March 31, 2014.


PROJECT SCHEDULE

As soon as possible following the awarding of the contract, a project kick-off meeting or teleconference will be arranged with the Contractor and the Departmental representative in order to clarify the terms of reference, and the expectations of both Environment Canada and Contractor.

The Contractor will participate in a project kick-off meeting or teleconference with the Departmental representative within one week of the contract start date.

The Contractor will submit deliverable 1 to the Departmental representative for review within five weeks of the project kick-off meeting.

The Contractor will submit deliverable 2 to the Departmental representative for review within nine weeks of the project kick-off meeting.

The Contractor will submit deliverable 3 to the Departmental representative within thirteen weeks of the project kick-off meeting.


ON-GOING SUPPORT

Regular feedback through e-mail or telephone calls shall be maintained between the Contractor and Environment Canada.

When required, and when deemed by the Contractor and Environment Canada to be mutually convenient, the Contractor shall attend teleconferences during this contract. The number of these events requiring Contractor attendance shall not exceed four. At these events, the Contractor may be responsible for the following:

•	Presenting the results of individual tasks undertaken pursuant to this contract.

•	Describing the methodology employed and defending assumptions made during the completion of any individual task defined by this contract.

•	Providing comments, based on the Contractor’s experience, of any technology-related issues that require clarification.


QUALITY ACCEPTANCE CRITERIA

All documents and correspondence produced by the Contractor will be subject to review in draft form by the Departmental representative or other designated persons. All work is to be performed to the satisfaction of Environment Canada. Sufficient flexibility is required of the Contractor to respond to changing schedules and unforeseen developments.


CONFIDENTIALITY

It is understood and agreed that the Contractor shall, during and after the effective period of the ensuing contract, treat as confidential and not divulge, unless authorized in writing by the Departmental representative or another designated person, any information obtained in the course of the performance of the ensuing contract.

Subject to the Access to Information Act (R.S.C., 1985, c. A-1), the parties – the Contract Authority (Environment Canada) and the Contractor – agree that the terms of this contract are confidential and each party shall use the same degree of care to prevent disclosure of the terms of this contract to third parties as it uses to protect its own confidential information of similar nature. Any failure of the Contractor to respect the confidentiality obligations is a default of the Contractor for which the Minister of the Environment may terminate the contract.


TRAVEL

No travel expenses will be associated with this contract.


MAXIMUM BUDGET FOR CONTRACT

Environment Canada has established a maximum budget for this project of $35 000.00 (taxes extra, as applicable).