A Catalyst
for Change
Regulatory Reform in Canada’s
Agri-Food Sector
Presentation at the
CHC Annual Meeting
March 4, 2009
Some Background on CAPI
Canadian Agri-Food Policy Institute
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A catalyst for change
Promotes dialogue across the value chain
Identifies significant emerging issues and trends
An independent voice on medium and long-term issues
Has a Board of Directors
Guided by a diverse Advisory Committee
A non-profit corporation
– established by the federal government in 2004
to advance the success of Canada's agri-food sector
What We Heard At CAPI Forums
Regulatory issues such as
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Need for regulatory reform (modernize the system)
Remove excessive regulatory burden
More flexibility in regulations
Quicker decision-making by regulators
Harmonization of standards with major trading partners
Comparable enforcement on imports as on domestic products
With continental free trade in food products, we must have
– access to comparable technology and
– accept technology based on regulatory decisions made in the US
Do any of these apply to the horticultural sector?
Regulatory Reform – A CAPI Priority
• CAPI’s Board was concerned that the sector’s success
and competitiveness were being threatened by the
regulatory system
• Regulatory reform to improve the competitive
position of the sector quickly became a priority area
for CAPI
CAPI initiated a project on facilitating regulatory change
CAPI Regulatory Project - Purpose
• Assist in implementing regulatory flexibility and reform through
use of a “regulatory policy framework”
• Provide input that results in a more flexible regulatory system,
which:
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Protects consumers;
Enhances competitiveness;
Fosters innovation;
Contributes to the sustainability of the Canadian agri-food system.
• Project focus is not on specific regulations
A Steering Committee with industry and government
representation has provided guidance on this project
CAPI Regulatory Project - Overview
A three phase project
1. Where is the sector today on regulatory reform?
2. Focus on regulatory issues in specific areas through “blue
ribbon panels”
– Possibly the horticulture sector as a case study
3. Leverage learnings to the national level and communicate
findings to a broader audience
– Possibly a national symposium
A very desirable outcome is to have a coalition (representing
the entire agri-food value chain) moving forward on regulatory
reform issues with government
Current Status of the CAPI Project
• Phase 1 is essentially complete
– Completed an issues paper to promote discussion and debate on
regulating in the agri-food sector
– Paper is being posted on the CAPI web-site (www.capi-icpa.ca)
• Phase 2 is being designed to help the industry move forward
with regulatory reform
– Can use horticulture to show how industry and government can work
together on regulatory reform
The overall project objective is to move the regulatory
agenda forward for the agri-food sector
What We Have Found to Date
– Current Action On Moving Forward
• Canada has a framework and approach to regulation
– Cabinet Directive on Streamlining Regulation
• Based on “Smart Regulations” report
– TB supporting documents
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Guidelines for Effective Regulatory Consultations
Assessing, Selecting, and Implementing Instruments for Action
Guidelines on International Regulatory Obligations and Cooperation
Canadian Cost-Benefit Analysis Guide: Regulatory Proposals
• Some progress is being made in some agencies
– too slow for some
• Government view on progress varies from industry view
A focus on implementing these regulatory concepts is required
What We Have Found to Date
– Constraints To Moving Forward
Progress is slow because:
• Regulators cannot make quick regulatory decisions
• Regulatory change often requires amending legislation
• Some agencies have insufficient infrastructure and capacity to
support the regulatory process
• Agencies are starting to adopt the “Cabinet Directive” but this has
not been fully executed
– Result is minimal demonstrated action
The will is there to move forward – examples exist such as the
fertilizer forum
How About a Regulatory System that:
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Is more flexible
Seeks industry input
Is based on agreed on regulatory policies and principles
Doesn’t always use a regulation to fix a problem
Eliminates unnecessary regulation or modifies regulation
Has the outcome of:
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Protecting consumers;
Enhancing competitiveness;
Fostering innovation;
Contributing to the sustainability of Canada’s agri-food system.
• Is more timely
Moving Forward on How Canada Regulates the Agri-Food Sector
Using a Framework to Move
Forward on the Regulatory Agenda
• In our first phase we developed a regulatory framework
• Which is consistent with the federal government’s direction
• The next phase of the project will be guided by focusing on a
“policy regulatory framework”
• Such a framework will consider an array of key regulatory issues
A Regulatory Policy Framework will be used to guide the
process, which is highlighted over the next few slides
A Regulatory Policy Framework
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A regulatory policy framework for the agri-food
sector is not a list of regulations
Rather it encompasses:
1. Regulatory policies
2. Regulatory institutions
3. Regulatory tools and processes
Does the agri-food sector have all of these elements?
When Should Government
Intervene?
• To provide public goods
– those goods and services that the market would not otherwise provide
• To protect the public interest
– safe food supply
• To provide information to help consumers make decisions
– E.g, labelling
• To ensure that private sector outcomes match societies objectives
– through standards, regulations, incentives, etc.
Government intervenes to help society achieve
desired outcomes
When should government not intervene?
How Government Should Decide
if Intervention is Necessary?
• Act without consultation
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• Consult with industry and affected stakeholders
– On the problem
– On the solutions
– On the type of intervention
Current government directives are heavy on consultation
Government Intervention Based on Principles?
Smart regulations (2004)
• Effectiveness
• Cost-Efficiency
• Timeliness
• Transparency
• Accountability & Performance
Federal Government (2007)
• Protect and advance the public interest
• Promote a fair and competitive
economy
• Make decisions based on evidence
• Create accessible, understandable, and
responsive regulation
• Advance efficiency and effectiveness of
regulation
• Require timeliness, policy coherence
and minimal duplication
We have some way to go to see the benefits of these
regulatory principles being fully applied
Is Regulation Always Necessary?
• Government intervenes using policy instruments
to influence behaviour
• Regulation is only one of many ways
• Behaviour can be influenced through:
– Preaching (and providing information)
– Pricing (using market mechanisms, taxes, incentives)
– Policing (regulations, standards)
• The approach taken can affect innovation and
competitiveness
Many policy instruments exist to achieve desired
outcomes – regulation is only one of them
Range of Policy Instruments
A regulatory system should first decide whether regulation is required,
and then have have flexibility on use of the type of policy instrument
used, including self regulation.
Is Regulation Always Necessary?
• When is a regulation required to implement an
industry desired standard?
• Do we often choose government regulation
versus industry self regulation?
– Does this result in over-regulation?
• Is government regulation pursued at times to
ensure that all companies comply with an
industry standard?
– That is, no free riders
Many policy instruments exist to achieve desired
outcomes – regulation is only one of them
What Type of Regulation to Choose?
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Prescriptive rules
Performance-based rules
Principle-based rules
Self-regulation by industry
Co-regulation
– sharing between industry and government
• Or market based instruments (incentives)
Choice of regulatory instrument can be based on a variety
of considerations, including impact on innovation
Choice of Regulatory Instruments
C an ad a
P r e s c rip tiv e
A u s t r a li a & N Z
M o s tly
P r e s c rip tiv e ,
S o m e R is k
O u tc o m e
B ased
M o st l y R i s k
O u tc o m e
B ased ,
Som e
P re s c r ip t ive
R is k o r
O u tc o m e
B ase d
F re e d o m to A c t
S i m p li f ie d E n f o r c e m e n t
D i ff ic u l t t o D e v e lo p S t a n d a r d s
N o t R e s p o n s i v e t o C h a n g in g N e e d s
F o s t e r s I n n o v a t io n
P o te n t ia l fo r I r r e s p o n s i b le B e h a v io r
M a y b e P u b li c H e a lt h C o n c e r n s
In Canada, regulations are more prescriptive compared to places like
Australia and New Zealand, which take approaches that are more risk
or outcome based (which can be more supportive of innovation)
Implementing the Regulation?
• Twenty years to implement regulatory
harmonization (e.g., CUSTA)
– Or
• Implementation within months
Our track record on implementation time
is not world class
Should Regulations be
Equally Enforced?
• Unbalanced enforcement of compliance with
existing regulations can affect industry
competitiveness
– E.g., labelling, MRLs on imports
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• All regulations should be equally enforced
– Does this have cost implications?
– Should this influence the type of policy instrument
used
Has equal enforcement been an issue, or is it an issue
of regulatory priorities – food safety being first?
Should Regulations be Reviewed for
Effectiveness or Necessity?
• Should we keep old regulations on the books?
– Or
• Should regulations be reviewed as to their
effectiveness
Many policy instruments exist to achieve desired
outcomes – regulation is only one policy
instrument
Does the Agri-Food Sector Require a
Regulatory Oversight Body?
• The agri-food sector is affected by a number of
regulators
– E.g., CFIA, PMRA, Health Canada, Industry Canada
• Does this result in a few too many silos?
Will an agri-food regulatory over-sight body improve
competitiveness and innovation in the sector?
What Does All of this Suggest?
• Progress on regulatory reform needs to occur
in the agri-food sector
• There is a better way to regulate
• An over-arching regulatory policy framework
can be used to guide how we regulate in the
agri-food sector
A Regulatory Policy Framework will be Used to Guide
the Process
Elements of a Possible Regulatory Policy Framework
Regulatory Policies and Principles
Regulatory Tools and Processes
Perceived
Problem
Institutions,
Regulatory
Bodies
and
Oversight
Performance
Assessment of
Regulation
Administration,
Compliance and
Enforcement
Assess
Public Policy
Issues
Consultation
Through-out
Implement Chosen
Instrument
Choose
Type of Regulatory
Instrument
Set Public Policy
Objectives
Determine Need
to Regulate
Next Steps Being Considered
• Help the sector move forward with regulatory reform
– Considering using the horticulture sector (as well as possibly other
sectors)
• Allows for specifics versus generalities
• Based on the regulatory policy framework approach
• To help implement the Cabinet Directive and TB guidelines
• Forming a “Blue Ribbon Panel” involving industry and
government:
– Would involve regulators and industry representatives in the horticulture
sector
– Your support and input is requested
Is there an opportunity to move forward in partnership?
Moving Forward on the CAPI Project
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Blue Ribbon Panels designed to have senior decision makers in
regulatory agencies, government and industry
Government participation on “Blue Ribbon Panels” at the senior
decision making level includes:
– Agriculture Canada
– CFIA
– Health Canada
– PMRA
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Partnership models with industry
– Financial considerations
– Can help shape the scope of inquiry and regulatory issues addressed
Moving Forward on how government regulates to “provide
the greatest overall benefit to current and future
generations of Canadians”.
Moving Forward on the CAPI Project
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Blue Ribbon Panels designed to
– identify issues, regulatory gaps and constraints
– develop solutions
– derive consensus on action steps, and
– seek commitment to action
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Facilitator to help the process
– ensure a non-confrontational process
– ensure the process is guided by the concepts in the
regulatory policy framework
Moving Forward on how government regulates to “provide
the greatest overall benefit to current and future
generations of Canadians”.
Moving Forward on Regulatory Reform
There are many options that can be used by the
sector:
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Case studies on a sector basis
• Case studies by broad regulatory issue or program
– E.g., labelling and heath claims, access to pesticides
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National symposium to leverage learnings and insights
• Build broad based coalitions to support regulatory reform
Moving Forward on how government regulates to “provide
the greatest overall benefit to current and future
generations of Canadians”.
A Catalyst
for Change
• Questions or Comments?
• Any feedback can be directed to CAPI’s
Project Manager
John Groenewegen
JRG Consulting Group
519-836-1860
john@jrgconsulting.com
• CAPI’s web-site www.capi-icpa.ca