Speaking Points for Scott Brison, President of the Treasury Board, at the Great Lakes Economic Forum

April 25, 2017

Detroit

Introduction

Thank you very much Stephen.

It’s a real pleasure to be with you today and to speak about the future of Canada-U.S. regulatory co-operation.

Regulatory cooperation is really all about trade.

The Canada-U.S. trade relationship is the economic engine that drives the Great Lakes Region.

Today, this region produces nearly 30 per cent of the jobs in Canada and the U.S. combined, representing almost 30 per cent of our combined GDP as countries.

The Detroit-Windsor crossing is the most important crossing between Canada and the U.S.

Thirty per cent of truck-based trade uses that one crossing.

It’s why as a government we are committed to investing in the Gordie Howe Bridge, the biggest infrastructure project in North America.

All of us here are committed to growing this region’s economy safely and sustainably and improving the well-being of its citizens.

The fact is our two countries depend on each other for our mutual prosperity more than any other two countries in the world.

This Great Lakes trading relationship is an important part of that relationship.

Two billion dollars’ worth of trade crosses the Canada-U.S. border every day.

Canada buys more from the U.S. than any other country – including Mexico, China, Japan or all members of the EU combined.

Canada is the number one customer for the majority of U.S. states, and among the top three customers for 48 states.

The U.S. enjoys a trade surplus with Canada.

An estimated nine million good American jobs depend on trade with Canada.

Our businesses are connected through shared supply chains in every sector.

In Detroit, if you consider the deep integration of our automotive sector, it’s important to point out that one car part can cross the border six times during the manufacture of one vehicle.

Our communities rely on each other for security and economic prosperity.

Our families have lived and worked together for generations.

We all know that relationships take work.

And we need to work together to reject protectionist measures, like local content requirements, that would harm our integrated supply chains, hurt trade, and jeopardize jobs on both sides of the border.

Let’s be clear.

If we build a trade wall between Canada and the United States there is absolutely no doubt who will pay for it – American workers and Canadian workers, American consumers and Canadian consumers.

We’ve got a great thing going here.

Let’s not disrupt the most successful trading relationship in the world.

America’s trade with Canada is balanced.

It’s fair and it’s mutually beneficial.

Indeed, our integrated markets have led to major U.S. content in Canadian exports.

And any increase of trade barriers between our countries including a potential border tax would kill jobs both in the U.S. and Canada and would increase the cost of living for American and Canadian consumers.

When it comes to the perennial and difficult trade issues like softwood lumber or dairy, let’s address them thoroughly and respectfully within international trade rules.

While we settle our differences on some of these tougher files let’s agree not to allow them to distract us from making real progress in an area where we agree and have shared interests.

And that’s regulatory cooperation.

We know that regulatory differences between our countries hurt our economies, increase consumer costs and hurt jobs on both sides of the border.

Canada-U.S. Regulatory Cooperation

That’s why Canada and the U.S. established the Regulatory Cooperation Council.

The RCC is a voluntary, low-cost initiative that helps reduce administrative and compliance burdens on business.

And at the same time, it has helped us raise the bar when it comes to protecting the health and safety of our citizens and protecting our environment.

Where our countries differ in areas like inspections, certification, testing, product approvals, and product monitoring, this initiative works to align them.

Which is why in their February Joint Statement, Prime Minister Trudeau and President Trump expressed their strong support for Canada-U.S. regulatory cooperation.

Despite our best efforts and the fact that we share similar regulatory goals, industry still faces different sets of rules and processes in too many cases.

We call it the tyranny of small differences.

As befits two sovereign nations, Canadian and American regulations have developed independently of each other.

Today, far too often, insignificant or outdated regulations and unnecessarily burdensome differences hurt business on both sides of the border, add to the price consumers pay and impede our economic growth.

The goal is to reduce the burden on hard-working businesses by lowering unnecessary and duplicative costs.

This, in turn, enables businesses to provide consumers with greater product choice at a lower price.

Simply put, regulatory cooperation makes it easier to trade goods across the border.

And we know that anything that thickens the border, be it tariffs, or unnecessary taxes or misaligned regulations, are bad for business and for consumers.

In fact, misaligned regulations between Canada and the U.S. are estimated to add 2 per cent to 10 per cent to consumer prices on both sides of the border.

But this isn’t just a story about dollars and cents.

It was under four years ago when a 74-car freight train carrying crude oil from North Dakota to New Brunswick derailed in the town of Lac-Mégantic in Québec.

Those exploding tank cars killed 47 people and levelled the town.

In the wake of this tragedy, Canadian and American regulators worked together to develop an enhanced standard for a new class of rail tank car for flammable liquids. 

These joint efforts have strengthened the safety of transporting dangerous goods between our two countries and help ensure the safety of citizens and towns along our interconnected rail network.

This is only one of the many examples of close cooperation between our 16 Canadian and U.S. agencies with mandates across key sectors that include transportation, agriculture and food, chemicals, energy, and pharmaceuticals.

Let me share a couple of other ones with you.

As part of a pilot project, Canadian and U.S. officials are carrying out joint inspections of vessels on the Great Lakes.

Again, this demonstrates how regulators from our two countries are working together to deepen the foundation of trust and collaboration.

Here in the Motor City, the heartland of the North American auto sector, harmonization in the vehicle sector is another example of how regulatory cooperation results in cost savings and efficiencies for manufacturers.

This includes alignment on motor vehicle safety standards for tires, frontal impact protection, and motorcycle brake systems.

Another example on rail is more efficient, less polluting rail locomotives will be coming to Canada as we harmonize up to American standards.

And regulatory amendments are underway in both countries to allow for the mutual recognition of propane cylinders, hopefully in time for barbecue season.

Once complete, this will save industry on both sides of the border time and money by not having to seek approval twice.

Mutual recognition often makes common sense.

Where our two countries respect each others’ good manufacturing practices, why shouldn’t we recognize this?

Take drug manufacturing inspections.

Canada and the European Union have had a mutual recognition agreement in this area for over 10 years.

Earlier this year, the U.S. and the E.U. announced they’ll be pursuing a similar arrangement.

Why should Canada and the U.S. not be working together to develop a mutual recognition agreement on drug manufacturing?

The bottom line is we have developed significant trust.

And with the support of people like you, I believe regulatory co-operation can provide real benefits to businesses and consumers on both sides of the border.

In February, I met Director Mick Mulvaney, one of my counterparts in the White House in the Office of Management and Budget.

When we met, we had a very good discussion about Canada’s experience with our “One-for-One” rule, what we’ve learned from it and how it can inform his administration’s “Two-for-One” rule.

And we talked about how we can work together in terms of regulatory cooperation.

One of the things we came up with is a discussion around how regulatory cooperation between our countries can dovetail with the U.S. administration’s “Two-for-One” and our “One-for-One” rule in Canada.

Director Mulvaney’s OMB and its Office of Information and Regulatory Affairs have determined that regulatory cooperation initiatives can be used as offsets against their “Two-for-One”.

In Canada, we are moving forward at Treasury Board, working with departments, in a similar direction to take into account regulatory cooperation successes as offsets against “One-for-One”.

In doing so on both sides of the border, we are providing a real incentive to agencies and departments to find areas of opportunity to cooperate in terms of our regulatory frameworks across the border.

In terms of regulatory cooperation as we go forward, I want to talk about what we’re doing now and what we’re going to do in the future.

At Treasury Board, every new regulation or regulatory change in Canada comes to the Treasury Board Cabinet committee.

We have added a lens in terms of our evaluation of any new regulation to determine its impact, if any, on regulatory cooperation with the U.S.

While there may be good reasons in a particular case for a regulation to take us further apart on something, I want to understand the reason.

There needs to be a good reason because I want to go in a direction where we narrow the delta between Canada and the U.S. on regulatory differences.

We have that now as a lens in terms of our discussions at Treasury Board whenever a regulatory change is proposed.

What we need to do also is when new regulations are developed our two countries need to work together from the beginning of the process, rather than after the regulations have been completed.

This would help minimize needless regulatory differences from the get-go.

And where our two countries share the same regulatory goals and have confidence in each other’s regulatory systems to achieve those goals, we can work towards recognition of each others’ inspections systems.

In short, one inspection, certification or approval, ought to lead to access to two markets.

To that end, in February of this year, Health Canada launched a pilot project for American sunscreens -- just in time for summer.

Certain U.S. manufactured sunscreens will be able to come to market in Canada without being quarantined and tested for a second time at the border.

This could save the consumer health product industry about CDN $100,000 per sunscreen product, potentially millions per company and provide Canadians with access to more U.S. manufactured sunscreens.

Regulatory cooperation is good for governments, for businesses and for citizens, whether they be consumers, entrepreneurs, employees and even medical patients.

Which brings me to our latest achievement in regulatory co-operation.

One that will be important to more than 6,000 Canadians who are diagnosed with Parkinson’s disease each year.

DaTscan™ is a diagnostic radiopharmaceutical that helps differentiate between Parkinsonian syndromes and other conditions.

Proper diagnosis of what is causing tremors can lead to very different treatments, so anything that assists faster, more accurate diagnoses is critically important.

Currently in Canada, the active ingredient in DaTscan™ is considered a controlled substance, which raises problems for its use in medical testing procedures.

In recognition of this and the fact that there is no evidence of misuse of this substance and an extremely low risk of diversion, Health Canada has determined that control of this specific substance under the Controlled Drugs and Substances Act may not be necessary.

As such, on Friday April 21, Health Canada published a proposal to remove the active ingredient in DaTscan™ from the controls of the Controlled Drugs and Substances Act.

Here in America you’ve already removed this ingredient from the U.S. Controlled Substances Act.

So a similar move in Canada would align us with the United States’ regulatory change and would open the door to clinical trials by researchers in Canada.

There are other success stories in everything from appliance energy efficiency to food safety to work being done on hazardous chemical labeling.

It’s very clear to me that regulatory alignment can contribute to the health and wellbeing of Americans and Canadians.

Conclusion

Today, we are perched on the shores of the greatest reservoir of freshwater on the planet.

It’s a reminder of our shared responsibilities as stewards of the health, safety and environment of the people who have traded across these Great Lakes for centuries.

The Canada-U.S. partnership is based on common history, culture, shared geography and values.

We enjoy the longest, most peaceful and mutually beneficial relationship of any two countries in the world.

Let’s preserve and enhance it and remind ourselves that any measure that thickens the border, including unnecessary regulatory differences, will cost jobs and increase costs for both Americans and Canadians.

In the meantime, our Government looks forward to working with Director Mulvaney, as well as the incoming Director of the Office of Information and Regulatory Affairs, and all of you to reduce the regulatory burden on businesses, lower retail prices for consumers, and create good middle-class jobs for both Canadians and Americans.

Earlier, I mentioned the biggest infrastructure project in North America, the Gordie Howe Bridge.

That bridge will further unite the Canadian and U.S. economies in the same way that Gordie Howe, Mr. Hockey, as an icon, united Canadians and Americans for decades.

A Gordie Howie hat trick is a goal, an assist and a fight.

It sounds a little bit like Canada-U.S. trade relations.

Remember, in hockey a fight only lasts about five minutes.

So let’s keep our sticks on the ice and get some pucks in the net in areas where we have absolute shared interests like regulatory reform.

Thank you very much.