Effective Regulatory Reform: What the United States Can Learn from British Columbia

Abstract

In 2017, President Trump signed Executive Order 13771, which required that two regulations be identified for elimination each time a new federal rule is proposed. The order also created, for the first time, a system of annual regulatory budget allocations for federal agencies. On the surface, the policy seems promising, as it resembles a similar program established in the Canadian province of British Columbia in the first decade of the 21st century. That program has widely been viewed as a success and inspired reforms elsewhere in Canada as well as in the United States. This paper compares the regulatory reform efforts in the United States with those in British Columbia as a means to predict whether the US effort is likely to be successful and to identify ways in which the US program might be improved. The article finds that the way in which the US regulatory reform is being implemented is limiting its scope to a degree that will likely undermine its effectiveness. For example, the number of rules that qualify as EO 13771 regulatory actions is narrowed to the extent that vast amounts of new regulations and most policy documents are exempted from the offset requirement. Furthermore, the complicated nature of the two-for-one requirement, whereby different sets of rules are counted as “ins” versus “outs,” is making reporting difficult, if not misleading. The authors recommend improving reporting and transparency by creating a system for tracking government-wide regulatory requirements or restrictions over time, as well as changing the two-for-one requirement so that the same sets of rules count as regulatory and deregulatory actions. Although the current reforms are clearly having some immediate impact, expanding the scope of what the reforms cover, adopting a simpler measure, and improving reporting in order to create more transparency would make the reforms more consistent with the reforms in British Columbia, which have a track record of success. This would not be difficult to accomplish, and the article recommends some practical changes that build on the current reforms in the United States.