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Overregulation a crushing burden for agri-food sector

A new report says the sector is particularly burdened by red tape

A new report on the cost of overregulation has singled out the agri-food sector for special attention.

The report by the Canadian Chamber of Commerce, titled Death by 130,000 cuts in reference to the number of federal regulations alone, said too much red tape is weakening Canada’s international competitiveness and dampening foreign investment.

There are an estimated 380,000 regulations on the books in Ontario alone, it said.

The biotechnology sector, pesticide management and food labelling are cited as examples of the discouraging aspect of government regulation.

Canada wants to boost its agri-food exports $75 billion annually by 2025 and, “Innovation in agricultural biotechnology — the development of new technology, products and processes — must be a driving force if Canada is to meet this target,” the report said. “As one of the most closely regulated industries in the world, rapid technological change in the biotechnology sector relies on efficient regulatory processes.”

In 2000, the federal government funded the Canadian Regulatory System for Bio­technology (CRSB), an initiative that provided $218 million in funding to six federal departments over seven years to build efficiency and effectiveness into biotechnology regulation.

The CRSB was wound down even though it made Canada a biotechnology leader and the sector has suffered as a result, the report said.

In 2017, industry stated that there has been little progress in improving the regulatory efficiency at Health Canada and the Canadian Food Inspection Agency, and long approval timelines are delaying new pro­ducts from coming to market or altogether reducing industry innovation.

“The current approval pro­cess for new products in Canada is generally much longer and more difficult than in the United States,” the report said. “They are also discouraging the use of cutting-edge innovations among small- and medium-size companies and public researchers.

“Canada can restore its competitive advantages in this sector by reinvesting in more predictable, transparent and efficient regulatory frameworks. Modernizing the delivery of these regulatory programs is critical to avoiding a reduction in innovative activities and causing Canada to fall behind the United States and other OECD countries.”

Meanwhile, the Pest Management Regulatory Agency is supposed to ensure all registered pesticides undergo full re-evaluation at least every 15 years and conduct special reviews if there are health or environmental risks associated with a product, the report said.

“PMRA currently has more than 100 re-evaluations underway, with an additional 369 expected over the next 10 years. As of early 2018 there were 23 special reviews in progress, with many more anticipated as the European Union implements a stricter regulatory approach that will result in up to 75 products being withdrawn from the market.

“The PMRA is not currently positioned to undertake this growing workload, though Canadian farmers depend on these reviews so they can access the crop protection products they need to remain competitive,” the report said. “Delays in new product approvals and post-approval evaluation processes can result in compressed timelines and insufficient consultation of stakeholders. This leads to increased investment costs and ultimately restricts product availability for Canadian farmers — putting them at a competitive disadvantage compared with their U.S. peers.”

Meanwhile the PMRA’s speciali­zed expertise is crucial to growing and sustaining Can­adian exports of agricultural products, the report said.

“PMRA expertise in both setting and defending maximum residue limits (MRLs) is now an essential element of trade facilitation. This requires active PMRA participation in international standard-setting forums and direct engagement with Canada’s international trading partners to foster collaboration on science policy and the establishment of MRLs internationally.”

To fulfil all its responsibilities in pesticide MRL matters “requires people and operating resources for travel, which the PRMA does not currently have,” the report said. “As a result, PMRA is relegated to an ad hoc firefighting role and has become a bottleneck to economic growth for Canada’s agricultural companies.”

Compounding the problems are provincial regulations on the sale, use, transportation, storage and disposal of pesticides, the report said. “Ontario and Quebec also restrict agricultural uses of some federally approved pesticides… These restrictions only serve to put farmers at a competitive disadvantage to their counterparts in other parts of Canada, as well as internationally.”

Health Canada’s proposed front-of-package (FOP) nutritional food labelling initiative will be another regulatory headache for the agri-food sector as it will apply to about half the products on grocery store shelves, the report said.

The United States Food and Drug Administration has developed a credible voluntary FOP labelling system that appears on products in Canadian grocery stores, the report said. The Codex Alimentarius Commission is currently developing global principles to underpin FOP labelling.

Despite that, Health Canada’s regulations will be inconsistent with both of these initiatives, the report said. “By moving Canadian regulations forward in the absence of global principles that are still under development, Canada is at risk of introducing a new barrier to trade with not just the United States, but with all of its trading partners.”

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