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Regulation

Preparing for Change: How Canadian regulatory bodies can face amalgamation fears

Incite, June 17, 20245 min read

This article is the first in a three-part series on amalgamation in the regulator landscape in Canada. We’ll be sharing insights from industry experts and regulators who have experienced the consolidation process firsthand.

In the regulator landscape in Canada, the possibility of amalgamation looms, driven by governmental pressures to create more regulatory consistency and eliminate redundancies.

For decades, each regulator has maintained order and ensured adherence to the various rules that govern their industry sectors, from healthcare to finance, environmental protections to telecommunications. As whispers of further consolidation grow louder, so do regulator’s concerns. Regulators often fear amalgamation for several reasons, with concerns primarily centered around losing autonomy, expertise, and the quality of oversight.

“Things have changed in the regulator landscape here in Canada – there’s a need for harmonization and less regulatory complexity within industries,” says Bradley Chisholm, founder and Principal of The Regulator Practice. “Regulators value their independence, and they are proud of the work they do. They’re willing to streamline operations but not at the risk of compromising the quality of their oversight.”

”Face your fears, ask the hard questions and have the heavy conversations, now.

Recent amalgamations in Canada’s regulatory landscape have primarily taken place in financial services, energy and utilities, transportation and health sectors. The amalgamation of health regulatory colleges in British Columbia has been a significant development, says Chisholm. In 2020, the province announced plans to reduce the number of regulatory colleges overseeing health professionals from twenty to just six, in a bid to streamline processes and enhance efficiency.

Preparing for the potential of an amalgamation

“In Canada, we have over 250 health profession health regulators —each with their own boards, and CEOs,” he noted. “It has pushed policymakers to consider if this is still the right approach and I think regulatory boards across industries will face this kind of scrutiny moving forward.”

Navigating an amalgamation is a daunting task and it’s difficult to predict which regulatory bodies might face the realities of amalgamation or when. So, how can regulators meet the challenges head-on?

According to Chisholm, the best course of action is to prepare for the possibility and that starts with defining your non-negotiables, focusing on the public interest mandate and rooting efforts in people and purpose.

“The first thing to consider is that it may happen and start discussions early,” says Chisholm. “The risk of not having the discussion is that you potentially miss an opportunity to get in front of it and influence it.”

Discussing your fears now can mitigate future risk

For some regulators, that fear of the possibility of amalgamation leads them to pretending it isn’t a possibility at all. It’s understandable, reassures Chisholm. Regulators face changes to operations and merging cultures at a time often fraught with tension and worry. But it’s even more challenging once the process has begun, to begin planning communications or structure operational approaches.

“Start having the conversations so that the system is ready if and when it starts to move in that direction,” he advises. “If it’s going to happen, then you will be in a better position to tackle it on your own terms and that can only happen if you are ahead of the curve.”

Regulators invest considerable time in planning to guide their daily work and applying that mindset to scenario planning for a possible amalgamation will be just as valuable when the time comes. Conversations about priorities, purpose and opportunities in advance can also benefit an organization during the consolidation process and can help mitigate risks.

“Regulation can already be a thankless job but there is value in exploring potential outcomes with your team and learning from other regulators, ahead of a major transformation,” says Chisholm. “Face your fears, ask the hard questions and have the heavy conversations, now.”

Bradley’s Top Tips for Regulators Facing the Potential for Amalgamation:

  • Bring your people together to build relationships
    When boards and/or leaders are brought together, and relationships form, it creates a strong foundation for productive and honest discussions throughout the process.  CEO to CEO, leader to leader, chair to chair, board to board – these relationships are critical.
  • Name, acknowledge and validate your fears
    There are a lot of fears amongst the various players involved in an amalgamation.  Some are valid and will be challenging, others just need a bit of probing and discussion to alleviate.
  • Define your non-negotiables  
    We all have them – these are the hills we are willing to die on.  If these are clear, you can more easily compromise on other issues and invest the time in priority areas. However, you might want to also include a process to ensure that the things you think are important are also important concerning your public interest mandate.
  • Talk about what’s most important  
    Once you define what is most important – engage in these discussions.  There will be a desire to dive into solutions immediately – resist that.  Some decisions don’t need to be made at the start and it’s often best to leave them to a time when relationships are stronger, and trust has been built.
  • Connect people to shared purpose  
    When things get off track, it’s important to connect decisions back to your shared purpose. Sometimes it’s as simple as asking “What is the best option in terms of the ability of this new amalgamated entity to protect the public?’. It may seem like a simple question, but it can have profound results.

The Regulator’s Practice is a collective of experienced regulatory practitioners with a passion for a supporting the leaders who have chosen to serve and protect the public. The Practice works with professional regulators across the country to navigate their unique challenges and develop governance and strategy solutions to fulfill their public protection mandate.

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