- Dec 12, 2018
It is well-known that Canada and the United States share the world’s most significant bilateral trade relationship. According to a new report released by the Ivey Business School’s Lawrence National Centre for Policy and Management, regulatory misalignment between the two countries often leads to administrative burden and increased costs. Despite integrated supply and value chains, Canada and the U.S. remain challenged by the existence of two highly independent regulatory systems, resulting in a significant amount of duplication and cost that can adversely impact trade and innovation.
North America’s agri-food sector serves as an example where increased regulatory alignment would prove beneficial. The report Advancing Canada-U.S. Regulatory Alignment: A Canadian Agri-Food Sector Perspective authored by Post-Doctoral Fellow Yadira Tejeda Saldana, highlights that the lack of alignment presents a number of significant challenges.
“The regulatory system has become one of the major impediments to investment and innovation within the Canadian agri-food sector,” said Tejeda Saldana. “As technology and society evolves, regulations must be updated to be coherent with the global regulatory environment, and especially with major trading partners.”
The report features two specific case examples including 3M’s regulatory struggle to obtain approval for new food safety technologies and Maple Leaf Foods’ journey to utilize more efficient food testing methods. The case studies demonstrate how regulatory misalignment is affecting the competitiveness of the agri-food sector in Canada by exacerbating challenging factors such as high costs to firms, duplicative approval processes, and limited access to new technologies.
Aimed at strengthening Canada’s trade relationship with the U.S., the report makes specific recommendations to address existing regulatory misalignments:
- trade should be considered in the policy-making process;
- industry stakeholders, regulators, and trade negotiators should have open discussions to improve regulatory cooperation;
- international and private standards should be included within national regulatory frameworks to facilitate trade, encourage investments, and boost innovation;
- a cultural shift towards regulatory partnership between Canadian and U.S. regulatory departments should be promoted downstream to support the adoption of common regulatory programs when possible; and
- a pilot project of a joint food safety mechanism should be considered as part of the regulatory cooperation efforts.
While the report focuses on the agri-food sector specifically, its recommendations are relevant to other sectors and should form part of an overall regulatory reform strategy for Canada.
Ivan Langrish, Associate Director, Media Strategy
About the Lawrence National Centre for Policy and Management
The Lawrence National Centre for Policy and Management bridges business strategy and government policy to contribute to Canada’s global competitiveness. The Centre educates future business leaders in public policy and government leaders in business strategy and conducts leading-edge research on major issues that involve business-government coordination. www.ivey.uwo.ca/lawrencecentre
About the Ivey Business School, Western University
The Ivey Business School (www.ivey.ca) at Western University is Canada’s leading provider of relevant, innovative and comprehensive business education. Drawing on extensive research and business experience, Ivey faculty provide the best classroom experience, equipping graduates with the skills and capabilities they need to tackle the leadership challenges in today’s complex business world. Ivey offers world-renowned undergraduate and graduate degree programs as well as Executive Development at campuses in London (Ontario), Toronto and Hong Kong.