The exemption section of the budget implementation bill has been amended, following a push from opposition at committee Monday. 

That clause proposed to amend the Red Tape Reduction Act to allow ministers to temporarily exempt people or businesses from all laws, except the Criminal Code, to “encourage innovation, competitiveness, or economic growth.” 

The idea is to create a ‘regulatory sandbox’ where businesses can test out innovative products, services and models without immediately meeting all regulatory requirements, as laws often take time to keep pace with emerging technologies.

The wording of the provision was an area of focus for the opposition as the budget implementation bill made its way through the legislature over the past few months. 

Conservative House Leader Andrew Scheer recently said his party would help the Liberals pass the bill if they agreed to amendments on the exception clause.

NDP, Green, and Bloc Québécois MPs also led the charge, saying the measure was drafted too broadly and deserved standalone legislation as opposed to being tucked away in a 600-page omnibus bill. 

Several Liberal cabinet members defended the new powers, with Finance Minister François-Philippe Champagne saying it aligns with legislation in other G7 jurisdictions. 

Conservative MP Sandra Cobena disagreed, saying the OECD countries had more boundaries.

“This is an immense concentration of power,” she told the committee on Monday. “I am moving today to strike a balance between innovation accountability and democratic safeguards.” 

The amendments include: 

• A mandatory 30 day consultation period prior to making the exemption; 
• Equal rules that apply to all participants within the sector, not only selected entities;
• An approval process that includes both a cabinet minister and the president of the Treasury Board;
• A requirement to present a full report to Parliament within 90 days, explaining rationale and whether a permanent legislative changes are warranted; 
• A requirement that ministers appear before committee to explain the sandbox; 
• Clear red lines for core statutes, including the Conflict of Interest Act, Access to Information Act, and the Auditor General Act. 

“While I would have preferred that this provision be removed from the Budget Implementation Act entirely… I believe that these amendments present a balanced and responsible path forward,” said Cobena.

Liberal MP Carlos Leitão said his government heard the concerns over the exemption clause, and is willing to support the guardrails proposed by the Conservatives. 

Green Party leader Elizabeth May also proposed amendments that would narrow the scope of exemptions to innovation only, but her motion was defeated.