Industry Committee on Feb. 19th, 2019

[Majid Jowhari, Liberal, Richmond Hill, ON]

Is there a specific sector, based on the strategic tables, that you're focusing on helping to export?

[Frances McRae]

In fact, the reason that the sectors for the six strategy tables were selected was that we believed these were high-growth sectors for Canada's economy. We particularly want to focus on growing companies in those sectors and moving them into export markets.

What we know about what helps companies succeed on the export market is that they have to have sufficient scale. What happens sometimes is that companies can get themselves into an exporting situation and they don't actually have the capacity to deliver because they don't have the scale that's required to increase—

[Majid Jowhari, Liberal, Richmond Hill, ON]

In this case, what you're suggesting is that it's more an issue of scale rather than regulations.

[Frances McRae]

When it comes to exporting, what we understand is that the top issue is finding the opportunities to scale, and that really helps them succeed on the international market.

When it comes to regulatory issues, this is something that the trade commissioner service is well equipped to help our companies understand before they get into export markets, so that they understand what they may be faced with in the local market.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Smith, how does this regulation help us internationally? We seem to have barriers interprovincially and with the territories, and now with CETA, CPTPP and CUSMA, we have an open market and we have access to 1.5 billion consumers.

How is this regulation helping us take advantage of these?

[Matthew Smith]

As Ms. McRae was mentioning, the trade commissioner service is well positioned to work directly with Canadian businesses that are interested in getting into other markets.

A lot of the concerns that are reported back to the department from clients are that, indeed, finding access to customers and matching with demand is a big part of gaining access to the markets, and so is overcoming some of the basic things you would always expect when dealing with shipping and customs clearance. There's a great deal of direct service you can get, and the trade commissioner service is free to Canadian clients who are able to work with it to get into a lot of different markets.

It's a very good time, as you mentioned, with all of this new access to markets opening up through the trade agreements. From a regulatory perspective, we have set up rules to try to create a predictable framework for business from a regulatory perspective, so that when our big trading partners are developing new rules that could have an impact on Canada, we've had them agree—whether it's CUSMA, CETA or CPTPP—to a set of rules that says they need to give an opportunity for Canadian businesses and the Canadian government to participate in the development of any new rules, so that we can provide our perspective on how they can be less impactful and less of an obstacle at an early stage. There are transparency requirements to make sure that they provide drafts of any new rules that would affect Canadian trade well in advance of the rule coming into place.

Even once the rule is finalized, our modern trade agreements require that at least six months, if not more time, is available from when the new rule has been finalized to the time it would actually have impact, so that there's time for businesses to be able to adjust to that change.

[Majid Jowhari, Liberal, Richmond Hill, ON]

This question goes to both Ms. McRae and Mr. Smith.

It's interesting that you talk about the impact. How do you measure the effectiveness of the regulations that are in place? What is the review process? I asked Treasury Board this question, and they said what they're suggesting is that departments should look into developing regulations and making sure the process is streamlined and that there is a measure in place, etc. I couldn't ask the Treasury Board the question, so I'm asking how you measure the effectiveness of the regulations. Is 100 a good number? Is 100 too many or is 100 too few? What regulatory review do you conduct and how do you measure the effectiveness of these regulations?

I only have 15 seconds.

[Voices]

Oh, oh!

[Frances McRae]

I think it's safe to say that the cabinet directive provides a framework for everyone to understand how they're supposed to develop and then review regulations. One thing we see—I'll speak to the effectiveness point for a moment—is that we have legislation that in some cases can be quite prescriptive about the type of regulation you can have. Their being prescriptive then forces you into some fairly prescriptive regulations.

I'll give as an example some of the regulation around the Weights and Measures Act. The Weights and Measures Act, in some areas, forces companies and forces us as a regulator to maintain paper-based processes because that requirement is written into the legislation, which is why the regulatory modernization bill's process, which the government announced is an annual process, is a really good idea. What it will do is allow us to clean up some outdated and irrelevant requirements that push people to maintain old processes and old ways of doing things just because they are written into the legislation.

Effectiveness depends on how we define effective. Obviously, we have environmental and health and safety regulations that are effective.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I know I'm out of time, but the way I measure effectiveness is in the way it helps new companies grow.

[The Chair, Liberal, Dan Ruimy]

You're both out of time.

[Frances McRae]

You're absolutely right. Effective, though, in the concept of government regulation, is a much bigger concept.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We're going to move to Mr. Lloyd.

You have five minutes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you.

My question is mostly for you, Mr. Smith, in your role with Canada's foreign trade and development.

What I've observed is there are obviously countries creating non-tariff barriers that are creating issues for our exporters, but we also seem to have many self-inflicted wounds through our own regulatory practices, which are limiting our ability to export products. We will have the Canadian Seed Trade Association and the Canadian Cattlemen's Association presenting in the next round today, so I want to get some questions in off the bat, particularly around citric acid washes.

Could you give us an update on where we are? The European Union will not accept Canadian beef carcasses and pork carcasses that have been washed with citric acid or vinegar-based solutions. Where are we in getting that non-tariff barrier removed by the European Union?

[Matthew Smith]

Thank you for the question.

I can say that the Canada-Europe agreement, the CETA, includes a number of different mechanisms to deal with the reality that there are a great many regulations of interest to Canadian business in the EU. In the space of many of our big agri-food exports, including beef—there are other meat exports from Canada that face regulatory barriers in the EU as well—we have set up and built on the WTO rules that already exist for non-tariff barriers related to health and safety for plants and animals, but also for larger industrial kinds of goods and products.

There's a dedicated place to raise those issues between Canada and European officials in such a way that they can be discussed in a dedicated forum. That's the kind of place to which we're bringing the type of concern you mentioned about the differing sanitary and phytosanitary practices for meat.

The Regulatory Cooperation Forum has also been established. This is the first time that you have a regulatory co-operation element right in a free trade agreement.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Does the Canadian Food Inspection Agency have anywhere in its mandate to assist Canadian exporters? Is its mandate completely cut off from that aspect?

[Matthew Smith]

I won't say that I'm an expert on the details of the CFIA's mandate, but I can say that they work extremely closely with our department and also with the federal market access secretariat, which is managed by the Department of Agriculture and Agri-Food. In fact, CFIA has people who are placed in our network of embassies overseas, including staff in Brussels, at our mission to the European Union. They work directly with federal officials on market access issues to support Canadian industry.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

That's really positive to hear.

In my constituency, I have a major issue with seed potato exports being impacted. The CFIA claims it found a pest 10 years ago. They've never been able to duplicate the result of that finding, yet that has prevented us from getting trade deals with countries, like Thailand, for exporting our products. Are they working closely enough to remove these irritants that are preventing us from exporting goods in the future?

Where's the co-operation between our federal regulatory agencies to have a whole-of-government approach to safely maximize our export capacity? Is that something this government is pushing? Is that something the departments are pushing in this country?

[Matthew Smith]

The recognition that there is a lot of interplay between the work of the Canadian Food Inspection Agency here and our ability to access markets overseas has led, in recent years, to the creation of a dedicated market access secretariat. In fact, you have the Canadian Food Inspection Agency and market access staff from Agriculture and Agri-Food Canada working together, with a single management structure, to make sure that focus and that whole-of-government approach are in place. Global Affairs Canada works together, as part of that federal market access secretariat, to make sure that you have everybody pushing in the same direction and trying to open those markets for Canada.

[The Chair, Liberal, Dan Ruimy]

Thank you.

The final question for this round goes to Mr. Longfield.

You have five minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair. Thank you, all, for being here.

I want to focus on the sharing of information between platforms. I'm thinking of BizPaL. When you're setting up a business, it will tell you which regulations you need to meet. Depending on how you answer questions, it will give you more forms for provincial, municipal or federal regulations.

I met with one of our businesses in Guelph this past week. He gave me a list of 17 federal regulations that he has to meet in Canada, plus two that he has to meet when he's exporting to the United States.

I'm just putting it on the table. When are these regulations due? Is it annually on March 1, annually on March 2, annually on June 1, annually on December 31, annually on the anniversary of issue or every six months? If you knew that it was the regulation system and you knew that on April 30, just to pick a date, all your regulations were going to be due, rather than having to go through your files to say, “Oh, it's March 1, so I have to set up this regulation....”

Why not look at something like BizPaL, where everything is in one place? You only answer the question once. You give your business licence number. It will fill in all the fields for your business name, location and the standard information that any form is going to ask. Is it possible to look at sharing data across regulations, like regulation 490 on one form and regulation 833 on another? Is there a way of sharing information across regulations, as well as harmonizing the dates that regulations are due for small business, to make it easier for them to do their reporting?

[Frances McRae]

You make a very important point.

Really what's happened is these regulations have been developed all on their own under different pieces of legislation that all came into force at different times. That's where we have all the different dates.

The question was asked earlier about how many regulations we have. While we don't have the federal, provincial and territorial numbers, we know that we have 400 acts with 2,600 regulations in them.

One of the things you may have heard about when you were talking to the Treasury Board Secretariat is that the new cabinet directive has a number of elements. One of them will require departments to regularly review the stock of their regulations. We believe this is very, very important for precisely these reasons. This has to be done with the Treasury Board Secretariat coordinating it, because if a department reviews its own stock and doesn't see a link to another department's regulation, or there's an industry that maybe has a lot of different requirements from different departments, that wouldn't be good. The whole idea is to get much more holistic about how we look at these things.

With regard to your question around pre-filled fields and sharing of information, again, some of the legislation we have in place doesn't allow for the sharing of information between departments. This is the idea that when we talk about a centre for innovation within government, we hope to be able to understand how we can make it much more business-centric and client-centric.

As I mentioned about the dates, because they've all come into force under different pieces of legislation, the cleaning up of the legislation under the annual regulatory modernization bill will hopefully start to tackle some of those anomalies.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

Mr. Smith, we look at trying to encourage exports for small business and we know that only 12% of our small businesses are currently exporting.

I have an example from one of the businesses in Guelph. He has OSHA form 300 and tier II emergency response reporting for the United States.

In terms of a BizPal type of model, if a business wanted to export to a major partner like the United States, is it possible to let them know what regulations they have to meet?

[Matthew Smith]

Part of the service that the trade commissioner service offers is to assess for each individual client how ready they are for different markets. Depending on the type of business they're in, how regulated their product or service is, what type of business environment they face, the type of product.... If it's something that clearly has a link to human health, like a pharmaceutical or medical device, it can be very regulated. Other products have a much less onerous set of regulations that they need to deal with.

Because it varies not only between markets but by type of business, we recommend that people get in touch with the trade commissioner service. They can meet with someone who is working with their sector and in the market they are intending to go to.

[Lloyd Longfield, Liberal, Guelph, ON]

Great, thank you.