By Michael Graydon, CEO of Food, Health & Consumer Products of Canada
Please note: This op-ed is featured on page 5 of the October 23, 2024 edition of the Hill Times.
Canada’s manufacturing sector is at a pivotal moment. As the backbone of our economy, it’s being weighed down by increasing regulatory burdens that stifle innovation and growth. A recent study by Canadian Manufacturers & Exporters (CME) and Food, Health & Consumer Products of Canada (FHCP) titled "Regulate Better, Grow Faster" highlights a critical issue: excessive red tape is hindering our competitiveness on the global stage.
Since the introduction of the one-for-one rule nearly a decade ago—a policy meant to balance new regulations by removing existing ones—the number of federal administrative requirements has surged by 14.6%, reaching 148,770 in June 2022. This relentless growth in regulations is more than just numbers; it represents real obstacles for businesses striving to thrive and innovate.
To overcome these challenges, we need a strategic and proactive approach. Here are key steps to create a more efficient and competitive manufacturing landscape in Canada:
Strengthen Leadership and Oversight Establish a dedicated Minister for Red Tape Reduction and create an empowered advisory committee. This leadership will ensure continuous evaluation and elimination of outdated or unnecessary regulations. An advisory body, similar to Denmark’s Business Forum for Better Regulation, would hold the government accountable to implement expert recommendations, fostering a business-friendly environment.
Expand and Integrate Regulatory Reforms Broaden the one-for-one rule to include all compliance instruments—such as legislation, policies, and guidelines—and incorporate economic growth considerations into regulatory mandates. Regulators should balance health, safety, and environmental protections with the need for economic advancement, ensuring that regulations support rather than hinder business progress.
Adopt Flexible, Outcome-Based Regulations Shift towards outcome-based and risk-based regulatory approaches that allow businesses the flexibility to innovate while meeting essential standards. Utilize regulatory sandboxes to test new products and processes in controlled environments, and employ Incorporation by Reference (IBR) to keep regulations current without excessive bureaucracy. This encourages creativity and efficiency without compromising safety and quality.
Harmonize Regulations Nationally and Internationally Align Canada’s regulations with international standards, particularly through collaboration with the United States via the Regulatory Cooperation Council (RCC). Eliminate internal trade barriers by harmonizing standards across provinces and territories. This reduces costs for businesses and simplifies both domestic and international trade, enhancing our global competitiveness.
Streamline the Permitting Process Reform the permitting system to reduce delays and complexities that hinder critical projects. Implement comprehensive permitting reforms and adhere to the “one project, one assessment” principle to accelerate developments. This alignment will support both our climate commitments and economic goals, ensuring that projects proceed efficiently and effectively.
Canada’s future depends on our ability to support and grow our manufacturing sector. Reducing regulatory red tape isn’t just about cutting rules—it’s about creating an environment where businesses can innovate, compete, and contribute to a thriving economy.
The time for action is now. By implementing these recommendations, the federal government can lift the burdens holding back our manufacturers, ensuring Canada remains a leader in the global market.
To view the "Regulate Better, Grow Faster" Report: https://cme-mec.ca/initiatives/regulate-better-grow-faster-report/
Michael Graydon is the CEO of Food, Health & Consumer Products of Canada (FHCP), representing Canada’s leading manufacturers of food, health, and consumer products.
This op-ed was originally published on LinkedIn.