When Governor Dodge was asked what role the federal government had in helping the manufacturing sector, one of the things he cited was a flexible regulatory regime. He said that was going to be critical, and we couldn't agree more.
Regulatory modernization has to get on the Government of Canada's economic and competitiveness agenda. We've heard this now from the OECD in 2004 in their report. We heard it from the External Advisory Committee on Smart Regulation in 2005. We've also heard it from various sectors in manufacturing who, while they all have different specific regulatory issues...overall the problems with regulatory frameworks are similar.
This represents for us the most significant barrier to innovation and growth, and an outdated and poorly functioning regulatory system is what stands in the way for most of what we as an industry would like to see in the future.
We're by no means alone in this regard. There are many barriers an inflexible system puts in our way. Just to name a few, we have complex and lengthy product approval procedures and processes. Sometimes the time it takes to get a product approved will be anywhere from two to four years. The window of opportunity for that product may only be 18 to 24 months, so the complex and lengthy approval process procedures are a real barrier.
We have unresponsive regulatory departments, through no fault of their own. The pace of innovation is much different today than it was when government departments and certain regulations were promulgated, so we're now facing thousands of product approvals, for example, and regulatory departments just cannot cope with the sheer volume.
We have a lack of jurisdictional and departmental cooperation. In some cases we have regulatory voids, in the sense that there is no regulatory framework to go through to be able to get a product to market. This frustrates the product launches and creates a drag on our competitiveness, our productivity, our investment, and our growth.
And it's going to be critical for the new global economy for us to have a flexible governance regime where we are not plagued by the tyrannies of small regulatory differences between trading partners, where we have an inability to adopt international standards and scientific evidence when they meet Canadian policy standards and objectives. At the same time we have regulatory multi-jurisdictional and multi-departmental processes that are not coordinated that are in need of being streamlined to keep pace with better and more rapid product innovation. In our sector alone, there have been significant advances in food technologies. These are creating unprecedented opportunities for product innovation, and our regulatory system is just not set up to meet them.
One of our CEOs commented recently that if, twenty years ago, he had been able to anticipate the state of Canada's regulatory approval system for food today, he would not have invested in Canada. And this is not a CEO from a multinational corporation; this is a CEO from a Canadian corporation.
We will need a modernized system that is results-focused and transparent, that minimizes the regulatory differences between trading partners, and that eliminates costly delays. This is going to be absolutely essential for our industry.
Without it, our sector will continue to languish, and it will leave Canadians without access to new products and, without that, without access to manufacturing jobs and economic prosperity.
One of the key things to remember is that while consumer expectations of our industry have evolved in step with product innovation elsewhere in the world, the Canadian regulatory system that governs food manufacturing hasn't. This is despite the fact that government is preoccupied with rising health care costs. There's a desire everywhere to embrace prevention, to give consumers the tools to manage their own health, and also--and I think this will be familiar to many of you--to help our farmers grow higher-value crops. That's something we hear. The inability to commercialize food innovation represents a barrier.
When the Food and Drugs Act was promulgated in the 1960s, you had maybe a few hundred products making their way to the market in Canada every year. It was a fairly negligible amount if you track that through the statistics provided by A.C. Nielsen. Today that numbers in the thousands, and in some cases the many thousands. So what you have is a regulatory system that was set up to deal with a couple of hundred products a year now dealing with a barrage of new products.
I'll just give you one example. In the natural health products area, there was an expectation that when the new regime was launched there might be somewhere between 2,000 and 4,000 applications for natural health products. The expectation is that there are probably 15,000 at the moment, with 10,000 in a backlog and perhaps as many as 45,000 to 50,000 products that might have to go through the process. The regulatory system is just not set up to respond to that.
I'll give you some specific examples of lost opportunity, since we're talking about health and the need to help consumers manage their own health. Food fortification is one. Most countries around the world have policies and regulatory frameworks for the discretionary fortification of food. Canada currently lacks such a policy. We started working on one in 1997 and 1998. It took five years to give birth to the policy. That was in 2003. The policy was born in 2003 and regulations were promised. Those regulations have yet to surface. So that's three years of waiting for regulations for food fortification. Our major trading partners have such frameworks. In Canada alone, if we take only the beverage manufacturing sector, we're estimating about $400 million of lost opportunity every year.
It is the same story with respect to health claims. If you want manufacturers to invest in higher value-added products, if you want them to invest in products that help manage consumers' health, you have to allow manufacturers to market those products accordingly and make claims about their health-enhancing benefits. Currently in Canada there is no regulatory framework for health claims. We have about five. Our closest trading partner has eighteen and twelve more in the pipeline. So we are still waiting for a process, and we are told that consultations are going to begin later in the year. We are just hopeful that the consultation process for health claims doesn't take as long as it did for fortification.