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Smart Regulations

Canadian PoliticsCanada-USA

Regulations are boring, bone dry and tedious, right? Red tape–better to get rid of it! That is the type of message you are likely to start hearing, as the “Smart Regulation” agenda for Canada rolls out. It is sure to get some support from those of us who feel we are under siege from constant demands for more paperwork. But take a closer look. Is “Smart Regulation” really smart?

Regulations are the rules that we make, via various levels of government, that define the scope and conditions of legal behaviour for businesses and individuals. The ability to regulate is a fundamental aspect of sovereignty. Regulation is the mechanism that makes the policy rubber hit the reality road.

The business class in North America has been chafing under the “irritation” of Canadian regulations. Minor differences between U.S. and Canadian regulations are making it hard to do business, they say. In 2003, the federal government responded to their hurt by appointing the External Advisory Committee on Smart Regulation (EACSR) to come up with some recommendations about how the process of regulation and the type of regulations in Canada could be “improved.”

The EASCR, which included corporate directors from the petroleum, biotech, pharmaceutical, hydro, coal, agri-business, mining, security-intelligence and financial sectors, reported to the prime minister in September, 2004. Paul Martin affirmed his commitment to implementing its recommendations in his subsequent throne speech.

The EASCR articulated a vision that is quite alarming. Protection has a bit part in this vision, while the market is the superstar. The vision statement confuses the regulatory role creating boundaries and limits on companies’ behaviour with the commercial role of promoting economic expansion and trade. “Smart Regulation” is not about efficiency and streamlining government. Rather, it is an integral part of deep integration, the process that would merge the Canadian and American economies.

Because regulation is a widely ignored topic, far less exciting than kickback scandals or vote-of-confidence brinksmanship, deep-integration strategists understand that regulatory harmonization is easier to deal with politically than overt policy integration.

The North American Agricultural Market Integration Consortium outlines in its “Roadmap to Agricultural Policy Integration” that “systematically pursuing harmonization one step at a time has the basic advantages of preparing and levelling the agricultural infrastructure for change while allowing a gradual adjustment to the newly evolving economics of agriculture and food.” The same paper notes that “harmonization can be taken one step at a time. However, with each step a degree of national sovereignty is lost, which may be the greatest deterrent to harmonization.”

Under “Smart Regulation,” safety, health and protection take a back seat to innovation, participation in the global economy, competition and other market-based values. According to renowned philosopher Jane Jacobs, such an admixture of “trader” and “guardian” functions produces a “monstrous moral hybrid,” since the ethics of the two are incompatible, even mutually exclusive.

The sectors that the EASCR focused upon were manufacturing and product approval; the automotive industry; the drug-review process; the chemical manufacturing industry; biotechnology; First Nations economic development; environmental assessment; and oil-and-gas exploration and development.

The EASCR recommends Canada set out to promote market integration by limiting the number of specific Canadian regulations, and instead adopt international standards (often a lowest common denominator), or, preferably, U.S. regulations. When specific Canadian regulatory requirements are adopted, the EASCR recommends that the federal government should “reduce or minimize the cumulative impact of regulatory differences on trade and investment” by using non-binding policy instruments instead of enforceable standards. It also recommends a “single review and approval of products and services for all jurisdictions in North America.”

Washington’s regulatory reach would extend even deeper into Canadian jurisdictions by means of the EASCR’s recommendation that a more seamless regulatory environment in Canada be created via federal-provincial-territorial arrangements. Thus, a cascading loss of sovereignty, as municipal regulations conform to provincial guidelines, provincial regulations implement the federal agenda, and the Canadian regulatory system replicates the rules designed (with much advice from industry lobbyists) to support American corporate hegemony.

Other aspects of the “Smart Regulation” agenda are privatization of regulatory functions (increasing use of voluntary measures, performance targets and self-regulation) and shedding liability from the regulator. Privatization offloads regulatory power onto the corporate sector, instead of giving it away to a foreign country.

The EASCR recommends that Health Canada officials be provided with immunity from litigation, similar to that provided to the American drug-regulatory apparatus. This recommendation follows the section of the report promoting faster drug approvals and adoption of approvals from other jurisdictions so as to provide pharmaceutical corporations with quicker access to the Canadian market. Yet, the EASCR admits that “the U.S. has a higher rate of products withdrawn from the market than Canada, but this is due in part to new pharmaceuticals often being approved in the U.S. before being submitted for review in Canada. This time lag allows Canadian authorities to consider post-market data in their scientific review, thereby reducing the number of withdrawals.”

The legislative framework required to implement “Smart Regulation” is beginning to hit Parliament. Bill C-27, the CFIA Enforcement Act, and Bill C-28, Amendments to the Food and Drugs Act, have been introduced and are, at time of writing, at the committee stage. There are changes being proposed to Canada’s health-protection legislation that would implement “Smart Regulation.” While the government may have hoped that Canadians would sleep while these Bills crept through the House, many of us are awake, and if enough bright light is shone on the “Smart Regulation” implementation process, we will be able to keep regulatory power in the hands of Canadian citizens and ensure that it is used appropriately.

Cathy Holtslander is project organizer for the Beyond Factory Farming Coalition.

This article appeared in the July/August 2005 issue of Canadian Dimension .

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