Improving Canada's Food Regulatory System will Boost Innovation and Economic Growth

OTTAWA, Sept. 1, 2011 /CNW/ - Canada's system of food policies, laws and regulations is generally working well to protect the health and well-being of Canadians. But well-intentioned regulations have not yet produced an effective system that boosts innovation and stimulates economic growth.

The food sector is one of the most highly controlled sectors of the economy, and the sheer number of government policies, laws and regulations (PLRs) has grown steadily over the years. The Conference Board of Canada's second foundational report for the Centre for Food in Canada, Governing Food: Policies, Laws, and Regulations for Food in Canada, concludes that policy-makers and regulators do their best to balance the competing demands of industry, multiple governments and consumers, but are hamstrung by an overloaded system. The system needs to be modernized; the current architecture has been developed by continual add-ons and consequently is burdensome and confusing.

"There is no quick fix to Canada's system for governing food. The problem is not so much in the actions being taken today, but rather the cumulative weight of existing PLRs and the motivations for them," said Michael Bloom, Vice-President, Organizational Effectiveness and Learning.  "Not only are parts of the current PLR system out-of date, multiple levels of government are involved, that sometimes act at cross-purposes to one another. The system can be described as suffering from 'scope creep'."

The Conference Board outlines five key attributes for optimal PLR systems. Optimal systems are:

  1. Proportionate—they align the regulatory burden with the severity of risk.
  2. Responsive—they adapt easily to new circumstances, such as food industry innovation.
  3. Efficient—they achieve regulatory outcomes at low cost.
  4. Effective— they achieve their regulatory objectives.
  5. Transparent—they can be understood by all stakeholders.

The PLR system attempts to address a wide variety of public interests, including safety, the environment, health, and economic sustainability. But the more goals it takes on, the more costly and slow moving it becomes—in turn, undermining its overall cost-effectiveness and stifling industry innovation. There are few self-rationalizing mechanisms that allow the system to respond to new demands without adding to the regulatory burden.

The report reviews the Canadian approach to food regulation based on a study of six issues: food additives, genetically modified foods, health benefit claims, country-of-origin labelling, inspection, and international trade.

In the areas of genetically modified foods, country-of-origin labelling, and food additives, the Canadian approach balances regulatory needs with industry sensitivities. However, the approach to health benefit claims, inspection, and international trade is not as effective, creating barriers to innovation in this sector.

Canada's inspection system - which has benefited from the consolidation of the Canadian Food Inspection Agency - is shared among three levels of government and also depends on the quality management processes of food producers throughout the supply chain. A prerequisite to reform is for the food industry and regulators to create more trusting and cooperative relationships - based on their mutual interest in safe food. On the issue of international trade, Canada is in the early stages of liberalizing its agricultural trade. The extent to which further reform is achieved will depend largely on changes to PLRs.

This report points out specific areas where the PLR system could more effectively meet the needs of the agriculture and agri-food sector, as well as government and consumers. A good starting point would be to revise and modernize the Food and Drugs Act, first enacted in 1920. The Growing Forward initiative and the federal Cabinet Directive on Streamlining Regulation are steps in the right direction that should, if properly implemented, go some way toward limiting regulatory overkill.

The modernization of PLRs is likely to be a key element in the Canadian Food Strategy, to be produced in 2013 by the Centre for Food in Canada. The Centre for Food in Canada is a multi-year Conference Board of Canada initiative supported by approximately 25 companies and organizations that have invested in the project.

SOURCE CONFERENCE BOARD OF CANADA

For further information:

Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext.  448
E-mail: corpcomm@conferenceboard.ca

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