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  "Not only are parts of the current PLR system out-of date, multiple levels of government are involved, that sometimes act at cross-purposes to one another.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:

Proportionate-they align the regulatory burden with the severity of risk.

Responsive-they adapt easily to new circumstances, such as food industry innovation.

Efficient-they achieve regulatory outcomes at low cost.

Effective- they achieve their regulatory objectives.

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.

Conference Board of Canada Press Release, September 1, 2011

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If Canada wants to play a leading role in addressing global demand for food and food security, the government must reconsider its refusal to open up domestic dairy, egg and poultry industries to outside competition, a New Zealand diplomat says.

"There are some policies that may have been very good in the past, but going forward are not necessarily going to help the industry succeed in its aims," said Koro Dickinson, second secretary at the New Zealand High Commission in Ottawa. "Which is being efficient, being productive, but also meeting the challenges that confront us."

Starting Wednesday, trade and agriculture ministers and senior officials from 19 countries known collectively as the Cairns Group will be meeting in Saskatoon to discuss ways to fight protectionism and open markets to agricultural products.

For Canada, this is an especially important goal as the country exported $35.5 billion worth of wheat, beef, canola and other agricultural and food products last year, and another $20.8 billion in manufactured food and beverages.

The primary purpose of the Cairns Group is to push for the successful completion of international trade talks at the WTO, called the Doha Round. Those talks, initially launched in November 2001, have recently become stalled again.

A senior Canadian official, speaking to reporters in advance of the Cairns meeting, said supply management, as the protection of Canadian dairy, poultry and egg sectors is called, is not officially on the agenda in Saskatoon. Rather, as host, Canada wants to look at ways to advance the Doha Round, tackle global food security issues and address a recent increase in non-tariff trade barriers.

But Dickinson said supply management remains an issue for many Cairns members like New Zealand as it is counter-intuitive to the group's goal of removing barriers to trade.

"While it may not be constantly and specifically raised, it's an issue that all members are clearly interested in," he said of supply management. "Cairns Group members generally see a vibrant global agricultural sector being driven by open markets, on-farm efficiencies and competitive forces. Most of Canada's agricultural industry runs along these lines. However, supply-managed producers are the exception."

According to the UN Food and Agricultural Organization, the world will need to produce 70 per cent more food by 2050 to feed an estimated nine billion people.

But former trade minister Stockwell Day said the idea that supply management is a significant barrier to feeding the world is a false one as technological advances have increased production significantly.

"The only damper on food production on any country is not whether they have supply management or not," he added. "But whether they have a democratic system that allows them to own their own land and relatively free markets."

He noted New Zealand has been extremely vocal in pressing Canada to open its dairy industry as the island nation is a major exporter of dairy products. It has gone so far as to block Canadian participation in a key Asia-Pacific trading bloc, the Trans-Pacific Partnership, over the matter.

The World Trade Organization in June issued a report on Canadian trade policy in which it also called on the government to reform its supply-management policies, starting with the dairy sector.

"Canada, especially Canadian consumers, would likely benefit from the liberalization of its dairy markets," reads the WTO report published in June. "This could also provide relief to some competitiveness issues, such as those that have been apparent in the cheese market."

In addition, the European Union has made the opening of supply-managed sectors a key demand in free-trade negotiations between the two sides. A senior EU official told Bloomberg last week that the Europeans were "disappointed" Canada hasn't offered any concessions on its supply-managed system, and warned it could refuse to open the doors to Canadian beef, port and sweet corn.

Despite the international pressure, the government has repeatedly said it stands by Canada's supply-management system, a position that is supported by the NDP and Liberals.

Day said many countries have sensitive agricultural sectors they protect, and that during his time in government, there were no discussions about changing the supply-management system.

Lee Berthiaume, Postmedia News, September 6, 2011

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