Pork Pen

Research shows that one of the fastest ways of boring someone to tears is mentioning the words “regulatory competitiveness.” It is, however, a critical topic, especially now when accessing markets around the world is being made more difficult, and enhancing the competitiveness of farmers in Canada is crucial to the economic sustainability of this driver of the Canadian economy. So, dear reader, stick with me.

Governments around the world are taking actions that limit the free flow of Canadian agricultural exports and increase farmers’ cost of production. Examples include label requirements on meat sold in the U.S., which will discriminate against Canadian live animal exports, as well as regulations in individual states whose influence extends across North America (e.g., Proposition 12 animal welfare regulations in California). We also see arbitrary European regulations that restrict Canadian red meat exports, despite the Canada-E.U. Comprehensive Economic and Trade Agreement.

The Government of Canada needs to be doing everything in its power to counter foreign regulations that undermine the competitiveness of Canadian farmers. Unfortunately, we have a regulatory system that can make the problem worse. For instance, there are federal regulations that impose extraordinary costs on Canadian producers not faced by our competitors. The carbon tax is the most cited regulation in this area, but it is not the only problem.

Another example of a regulatory system that is draining away the competitiveness of Canadian agriculture is the approval processes for pesticides, new cropping technologies, animal health products, and animal feed ingredients, overseen by Health Canada. These regulations are long past due for reform. Farmers in competing countries like the U.S. have rapid access to new products and technologies, while the slow pace of the regulatory approval process in Canada can block Canadian farmers’ access to innovation. In too many cases companies bringing these new products forward do not even apply to Canada because of the cost and time involved in navigating the Canadian regulatory system. An animal health company recently told me “We do business in over thirty countries around the world and Canada is the most costly and time consuming country in which we operate.”

For example, farmers in the U.S. can use a product (Sodium Metabisulfite) that removes the toxins produced by the fusarium fungus that grows on cereal grains. This innovative product helps convert the infected grains from a waste product into a valuable feed source. Canadian farmers are still waiting for approvals. Another product is Carvacrol, which is an essential oil derived from oregano. Scientific research shows it can improve gut health in pigs, increase appetites of young pigs that have recently been weaned, and alleviate diarrhea. U.S. farmers can use Carvacrol, but Canadian farmers cannot. Preventing Canadian farmers from accessing innovations in animal health and nutrition can also stymie other national objectives, like providing alternatives to antibiotics.

Restrictions on Canadian farmers access to new innovative technologies and animal health products could be significantly reduced if Health Canada were to agree to accept the research and data that go into the approval processes in other countries with a robust regulatory approval system, like the U.S. This policy solution has been on the desks of multiple federal health ministers in multiple federal governments.

It is not just products approved in the U.S. before Canada that are a problem. Products approved in Canada but not in the U.S. are of concern because they can become trade barriers, especially in this age of rising protectionism. We have seen in the past that individual state governments can use the lack of harmonization as an excuse to block trade.

When the North American Free Trade Agreement was first signed, Canada and the U.S. created a process, the Regulatory Cooperation Council (RCC), whose purpose is to increase North American productivity through the harmonization of regulations. Minister Anita Anand, the President of the Treasury Board, has recently held consultations on the priorities for the RCC. Removing drags on Canadian agricultural productivity and protecting our export markets by expediting approvals for products already scientifically approved by our key trading partner should be at the top of the Minister’s priority list.

There is much governments can do to spur agricultural productivity and protect our export markets. Regulatory alignment with our largest trading partner should be a top priority for our regulatory and international trade agencies. That could rapidly happen if there was political will.