Warning: Health Canada can be hazardous to the economy

In 2011, Canada and the U.S. launched the Regulatory Cooperation Council (RCC), a forum to bring together stakeholders and regulators from both sides of the border to eliminate wasteful regulatory differences between the two countries. Political and business leaders supported the RCC because they believed that removing unnecessary and duplicative barriers to trade would spur economic competitiveness while maintaining strong protection for health, safety and the environment.

Although the RCC continued to be supported after the election of new federal governments in both Canada and the U.S., Canada has put its commitment to regulatory co-operation in question by proposing new regulatory barriers to trade. Health Canada is now proposing frontof-package labelling regulations that, if enacted, will impose mandatory warning labels on foods that are high in sugars, sodium or saturated fat (with “high” being defined as more than 15 per cent of an individual’s daily recommended value).

Giving consumers the information they need to make informed decisions makes sense. Imposing a system that’s out of step with where the rest of the world is going, however, does not.

Requiring mandatory front-of-package labels would see Canada significantly diverge from the approach taken by other major jurisdictions, including the EU, U.S., U.K. and Australia, none of whom have mandatory front-of-package labelling. The United States Food and Drug Administration (FDA) informed U.S. food manufacturers in 2009 that unless a voluntary industry action resulted in a common, credible approach to front-of-package labelling, the government would use regulations to set standards. In response, the U.S. industry launched the Facts Up Front initiative, a voluntary labelling system that provides key nutrition information on the front of food and bev- erage packaging. The Facts Up Front label is recognizable to many Canadians as it appears on many products on Canadian supermarket shelves.

Instead of following the successful, recognizable, voluntary U.S. initiative, Health Canada is proposing a go-it-alone approach that separates us from our largest trading partner. This inconsistency will create confusion among consumers while increasing costs for Canadian companies. The timing is also troubling. Front-of-package labelling has become a fly in the ointment in the ongoing NAFTA negotiations where the U.S. is seeking to limit member countries from imposing initiatives like those proposed by Health Canada. We need to resolve issues that are on the negotiating table, not add to them.

Not only do the regulations undermine our trade objectives but they also fly in the face of Canada’s broader goals for the agri-food sector. In its February 2017 report, Unleashing the Growth Potential of Key Sectors, the finance minister’s Advisory Council on Economic Growth led by Dominic Barton noted that Canada has the potential to become the second-largest agricultural exporter in the world. The council identified a need for harmonized agri-food regulations, attracting more for- eign direct investment and using regulatory levers to remove obstacles to growth.

The government responded to the advisory council in last year’s budget by setting an ambitious target to grow Canada’s agrifood exports from $55 billion a year today to $75 billion by 2025. To meet this goal, the first question we ought to ask is: How can we — business, government and decisionmakers — help Canadian businesses be more competitive and equip them to take advantage of the new opportunities opening up around the world? In an increasingly globalized economy, introducing a new technical barrier to trade will only make expanding our agri-food exports harder.

In April 2017, Scott Brison, the minister responsible for the Regulatory Cooperation Council, correctly stated that, “Regulatory co-operation helps to reduce the burden on business, including by making it easier to move goods safely and efficiently across the border, and we know that anything that thickens the border, be it tariffs, taxes at the border or misaligned regulations, is bad for business and bad for consumers in both Canada and the United States.” The minister’s diagnosis is true of Health Canada’s well-meaning, but misguided front-ofpackage food regulations.

Canada’s agriculture and agri-food sector has a strong and well-earned global reputation. If we want to further strengthen Canada’s leadership in high-value food production and exports, we need a supportive regulatory environment, not another hurdle for an already overregulated sector.

FRONT-OF-PACKAGE LABELLING HAS BECOME A FLY IN THE OINTMENT IN THE NAFTA NEGOTIATIONS.