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NEWS RELEASE · 29th August 2011
Government of Canada
REGULATORY COOPERATION COUNCIL – Part One

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Summary Report on Consultations With Canadians on Regulatory Cooperation Between Canada and the United States

Overview

On February 4, 2011, Prime Minister Stephen Harper and President Barack Obama formally announced the creation of a Canada-United States Regulatory Cooperation Council (RCC) to simplify and align Canadian and American regulatory approaches, where possible. The result of such cooperation will be lower costs for business and consumers, increased trade and investment, and ultimately the creation of more jobs on both sides of the border. Citizens of both countries deserve smarter, more effective approaches to regulation that enhance economic competitiveness while maintaining high standards of public health and safety and environmental protection.

In the first phase, Canada and the U.S. will develop an initial Joint Action Plan that will identify initiatives in priority sectors for action. These initiatives will increase regulatory transparency and coordination between the two countries.

To inform the development of the RCC Joint Action Plan, the Government of Canada invited input from a range of stakeholders, including Canadians, business and industry associations, regulatory departments and agencies, and provinces and territories. Input into the Canadian consultations for the initial RCC Action Plan was requested by May 31, 2011. However, ongoing input has been welcomed and will continue to inform the RCC's work. The RCC also considered comments received by Foreign Affairs and International Trade Canada in its May 2010 consultations on future areas for North American regulatory cooperation1, as well as input relevant to the RCC's work received through consultations held by the Red Tape Reduction Commission2 and the Beyond the Border Working Group3.

This document provides a summary of input received in response to the RCC's call for consultations to develop a regulatory alignment action plan. It does not reflect the views or position of the Government of Canada.

Who We Heard From

The consultation process generated a wide range of comments and public feedback from individuals, businesses and organizations.

Over the course of the consultation period, the RCC received feedback from across Canada, including input from private citizens, think tanks, corporations, and a wide range of industry and business associations representing several sectors of the Canadian economy. These include agriculture and food, health and consumer products, energy, transportation, manufacturing, and various cross-sectoral business associations. In all, 170 submissions4 were received that outlined recommended approaches and considerations to help guide the RCC's work and joint cooperative efforts.

A list of all the organizations that provided input to the RCC consultation exercise is provided in Appendix 3. Note that some organizations provided more than one submission.

What We Heard

Consultation submissions covered a wide range of topics, including items of broad, cross-sectoral application or impact, as well as industry-focused proposals related to specific situations or issues. The following provides an overview of recommended areas for enhanced regulatory cooperation, organized by sector.

Sector
Key Issues Raised

Agriculture and Food


This sector constituted one of the most frequently cited areas for regulatory alignment. Key issues raised by stakeholders included developing common approaches to food safety requirements, biotechnology product approvals, crop protection products, labelling, packaging and product content information, expediting export certification, protecting animal and plant health animal feed and pet food, veterinary drugs, and reducing duplication of product-verification activities.


Transportation

Transportation was also frequently cited as a sector that would benefit from further regulatory alignment between Canada and the U.S., especially for the road, air, marine and rail transportation modes. Regulatory issues raised included alignment of motor vehicle safety standards (including for electric and alternative energy vehicles), the movement of empty containers and trailers, heavy vehicle weights and dimensions, marine security regulations, regulations pertaining to the Great Lakes and St. Lawrence region (e.g., environmental and emissions requirements, pilotage services), vessel clearance and reporting requirements, screening of cargo and passengers, construction standards for pleasure craft, pre-clearance of passengers, and shipping requirements for dangerous or hazardous materials.


Health and Consumer Products

Suggestions were raised on ways to reduce duplicative testing, standardize classifications, harmonize labelling, leverage the regulatory resources of each country, and align safety standards for a range of consumer and health products. These included pharmaceuticals, therapeutic and personal care products, toys, standards for electrical and plumbing products, chemicals, and telecommunications products, among others.


Environment and Energy

Given our shared environment and the significant energy trade between both countries, this was also an area frequently raised in submissions. Key regulatory issues addressed included alignment of greenhouse gas standards for vehicles and engines, energy efficiency standards, chemicals management processes, and environmental assessment procedures for cross-border energy infrastructure.


Cross-Cutting Issues

Several stakeholder submissions raised regulatory issues that cut across multiple sectors, such as nanomaterials, "rules of origin" requirements under the North American Free Trade Agreement (NAFTA), and standards-settings and conformity assessment procedures. In addition, stakeholders highlighted procedural considerations in developing regulations, such as the importance of quantifying the benefits and costs of various regulatory options, ensuring maximum transparency of regulatory initiatives, and coordinating information gathering within and between governments to reduce duplication.

Respondents also identified a variety of issues for consideration, such as changes to domestic policy or regulations, and requests for domestic funding of projects or initiatives that were determined to be outside the scope of the RCC's work. Where applicable, these issues have been shared with the relevant federal departments or agencies.

Input From Individuals

In most cases, submissions from individuals did not propose specific initiatives for regulatory cooperation, but suggested broad or general themes and/or suggestions, some of which did not pertain to regulatory alignment. For example, 30 of the submissions related to issues such as security, border regulation and administration, and immigration, all of which fall within the responsibility of the Beyond the Border Working Group.

A number of individual respondents expressed support for increased alignment and coordination between Canada and the United States. Some expressed the view that although sovereignty is important and must be maintained, increased cooperation with the U.S. would be beneficial with respect to trade and communication.

Meanwhile, many other individual respondents expressed reservations about the RCC initiative. Some are absolutely opposed to any further Canadian integration with the U.S. and expressed concern for the perceived erosion of Canadian sovereignty, rights and public accountability that would accompany heightened regulatory alignment.

Generally, individuals who support regulatory alignment with the U.S. expressed caution, based on shared values and principles. In this regard, individuals identified a number of common ideas, including the following:

• Efforts to achieve greater alignment and cooperation should not be done at the expense of Canada's sovereignty as an independent country.

• Alignment should not be synonymous with Canada's automatic adoption of U.S. rules. Rather, the selected approach should be in support of the best interest of Canadians.

• Initiatives should be selected only by carefully considering the benefits to Canadians as well as the costs.

• Alignment and cooperative efforts should be designed to ensure continued protection of Canadians' civil rights and personal information.

• Efforts should foster the protection of the way of life of First Nations peoples.

• Initiatives should be pursued, and actions taken, in a clear and transparent manner, including due parliamentary process that involves appropriate consultations.

Input from Businesses and Organizations

Input was also received from businesses, think tanks, and a wide range of local and national organizations.

Industry submissions generally reflected a very high level of support for greater regulatory alignment and cooperation between Canada and the U.S. Respondents noted the importance of establishing a regulatory regime that supports effective and efficient production and distribution, drives productivity and the Canadian economy, and provides consumers with lower prices and more product choices, while maintaining high standards of public health and safety.

As a backdrop to recommendations and the work of the RCC, organizations generally emphasized the significance of trade between Canada and the U.S. and the integration of our markets. Some organizations pointed out that trade between Canada and the United States is important to both countries—not just Canada. One organization, in explaining the significant benefits that enhanced alignment would bring to both countries, highlighted that Canada is the number one trading partner for as many as two thirds of American states.

Respondents also underlined the global nature of markets, which are no longer defined by national borders and are composed of integrated supply chains. As more than one organization highlighted, the same product may cross a border multiple times in the production process before being completed and becoming available to consumers.

Some respondents emphasized the need for efficient frameworks and processes to support industry's ability to succeed financially and meet the growing needs of its customers. In describing the global and complex consumer product market, one organization made the case for ensuring that Canada's regulations are in line with other nations, especially with our largest trading partner—the United States.

Many submissions remarked on the growing number of regulatory requirements imposed by different organizations on both sides of the border and urged greater coordination between Canada and the U.S. Organizations pointed to the various authorities in Canada and the U.S., which both require often similar information during the import process, and the perceived lack of coordination among government agencies.

Finally, a number of respondents remarked on the disproportionate impact that duplication and inefficiencies have on small and medium-sized organizations. They pointed to excessive paperwork and the misalignment of regulations as being an impediment to doing business across the border and, by extension, an impediment to growth.

Industry submissions supported the notion that appropriate and effective regulations are necessary to support essential objectives of health, safety, and environmental and consumer protection, and expressed that these objectives should not be sacrificed in the interest of greater alignment. Throughout the industry submissions, respondents identified areas where they believed alignment could be achieved without sacrificing product quality and consumer protection.

Recommended Approach for a Regulatory Framework

Although most organizations made specific recommendations regarding opportunities for regulatory alignment and cooperation in their sectors, many also suggested an approach to making the regulatory framework more effective and efficient. The following summarizes these general and broad-based recommendations from organizations:

Sovereignty: In moving toward greater regulatory alignment and cooperation, each country's sovereignty must be respected and maintained.

Decisions based on science: Policy and regulations should be guided by science-based decision making. In the absence of compelling scientific reasons for maintaining differences, alignment of regulations should be the rule, especially when it could save money and enhance access to products.

Going beyond simple alignment: Given the deep integration of various sectors and industries in Canada and the U.S., the end objective must go beyond the mutual recognition of existing regulations. Ideally, it would result in establishing joint regulatory objectives, collaborative research on regulatory options and primary data collection, and shared peer reviews of regulatory development and ongoing performance.

Risk management: Decisions on creating and administering regulations, and possible alignment, must be supported by risk assessments to identify the real need for regulation or for a uniquely Canadian approach.

Cost-benefit analysis: Many respondents noted the significant costs that can result from regulation and enforcement and advocated assessing the costs in addition to the expected benefits. In that context, some submissions suggested that the rationale for certain regulations, or the need for their differentiation from U.S. or international standards, is not well explained or persuasive.

Duplication: A common theme that emerged was the desire to enhance coordination and avoid inefficiencies in such areas as the submission of paperwork, data collection and evaluation, approvals, and testing.

Clarity, consistency and predictability: An important element of an effective and efficient framework is to provide businesses with clear rules and consistent application (ideally on both sides of the border), leading to predictability for businesses that are looking to comply.

Level playing field: It would be important to establish a level playing field for Canadian businesses, both with their American counterparts—and the rules under which they operate—as well as with individual citizens.

Pilot programs: Pilot programs were suggested to test new frameworks and processes.

Cited Examples of Regulatory Alignment

In support of the RCC's efforts toward achieving greater alignment and cooperation, several submissions noted examples and best practices to serve as models to inspire the work of the RCC or more generally as foundations to build upon. Two examples of broad regulatory harmonization that were cited are as follows:

European Union (EU): A number of EU agencies have been established to guide the activities of the 27 member states' competent authorities to provide information and assist in administering and enforcing the provisions of common regulations. For example, the European Chemicals Agency was established recently to manage the registration, evaluation, authorization and restriction of chemical substances manufactured, imported and used in the EU. In addition, the agency provides member states with scientific and technical advice and assistance on chemicals.

The Australia-New Zealand Trans-Tasman Mutual Recognition Agreement was referred to as a model that focuses on leading science, holds safety paramount, and allows for more predictable and efficient approvals. Respondents noted that it establishes a relationship that ensures that products developed and approved for sale in one country can be sold in the other, without further testing and approvals. The process is said to work well to reduce regulatory complexity and costs for businesses and consumers while allowing each country to regulate separately, based on unique needs.

A number of other examples of intergovernmental collaboration or joint initiatives that relate to specific products or industries were highlighted as successful examples of the power of the partnership between Canada and the U.S. on the international stage. The examples that were noted are briefly outlined in the following:

Automotive industry: There has been a history of automotive industry integration, starting with the Auto Pact in 1965, evolving to the Canada-U.S. Free Trade Agreement and subsequently NAFTA. As an outcome of this collaboration and cooperation, vehicles are currently designed, tested and produced in Canada and the U.S. for use in the North American market. The economy of scale produced through this integration has benefits for manufacturers and consumers.

Pesticide joint review process: This joint review process emerged out of the NAFTA Technical Working Group on Pesticides. It allowed the two regulatory agencies to share components of the pesticide review process, allowing Canadian farmers to have more efficient access to new technologies at the same time as their American competitors.


Health Canada pilot: This pilot is intended to expedite the review of applications for minor manufacturing changes when these changes have already been approved by the U.S. Food and Drug Administration.

Conservation: Examples of Canada-U.S. cooperation on conservation include the International Joint Commission, International Peace Parks Expeditions and the North American Waterfowl Management Plan.


Policy coordination in the Great Lakes Basin: Examples include the Canada-U.S. Boundary Waters Treaty, the Canada-U.S. Great Lakes Water Quality Agreement, the Canada-United States Air Quality Agreement, and the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement.

Vehicle emissions standards: Ongoing collaboration between Canadian and American agencies has resulted in the alignment of vehicle emissions standards.

What We're Doing: Next Steps

Both Canada and the United States have consulted with the public and stakeholders to receive input for the development of a Joint Action Plan on regulatory cooperation. Both sets of consultations concluded in spring 2011.

Since then, members of the RCC and senior officials from regulatory departments and agencies have met several times to identify potential areas and initiatives for the Joint Action Plan. Feedback from consultations was carefully reviewed by both Canada and the United States and informed discussions regarding what initiatives would be included in the Action Plan.

The RCC Joint Action Plan is expected in fall 2011.

The RCC continues to welcome feedback from Canadians and all stakeholders. Comments can be submitted through a number of channels, including the Perimeter Security and Economic Competitiveness website5 and by email at rcc-ccr,,,tbs-sct.gc.ca.