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Regulatory Cooperation Council and Regulatory Cooperation Council and Enabling Financial CooperationEnabling Financial Cooperation

TBWGTBWGApril 23April 23rdrd, 2013, 2013

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Putting the Shared Vision to Work

• Leaders announced the Shared Vision for Perimeter Security and Economic Competitiveness on February 4, 2011

• Created two binational initiatives to realize Shared Vision goals:• Regulatory Cooperation Council (RCC)Regulatory Cooperation Council (RCC)• Beyond the Border Working Group (BTB)Beyond the Border Working Group (BTB)

• Two separate, yet complementary, Action Plans were released in December 2011:• Joint Action Plan on Regulatory Cooperation (“RCC Joint Action PlanRCC Joint Action Plan”)• Action Plan on Perimeter Security and Economic Competitiveness

(“Beyond the Border Action PlanBeyond the Border Action Plan”)

• The two Action Plans are designed to speed up legitimate trade and travel, improve security and economic competitiveness in North America, and align regulatory approaches between the two countries, where appropriate

• These agreements represent the most significant step in Canada-U.S. cooperation since the signing of NAFTA

• BTB Implementation Report and RCC Progress Report released on December 14, 2012

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The Initial RCC Joint Action PlanA starting point for change

The RCC Joint Action Plan:The RCC Joint Action Plan:

• 29 specific initiatives for greater regulatory alignment: agriculture & food, health & consumer products, transport, the environment, cross-cutting issues

• Specific goals with interim deliverables and set timeframes

• Each initiative represents an opportunity to resolve existing misalignments while setting precedent for future solutions

• An opportunity to learn from specific initiatives to develop broader mechanisms that will avoid unnecessary regulatory differences in the future

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1. Manufacturing sector competitiveness 1. Manufacturing sector competitiveness and retail sector efficiencyand retail sector efficiency

– Decreased production costs– Increased competitiveness– Aligned product approvals and

standards

What are the Potential Benefits of Regulatory Cooperation?

• Regulatory alignment and ongoing cooperation provide direct benefits in two areas:

2. Regulatory efficiency and effectiveness 2. Regulatory efficiency and effectiveness – Partnering in common areas– Removal of duplicate requirements– Combined/shared expertise– Work sharing

Both of these areas bring Benefits for consumersBenefits for consumers

– Greater access and choice– Combined expertise of Canadian and U.S. regulators

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• RCC requests public/stakeholder input Spring 2011Spring 2011• Binational working groups established Mid-2011Mid-2011• Consultations summary report released August 2011August 2011• RCC Joint Action Plan released December 2011December 2011• Formal stakeholder meetings January 2012January 2012• Working Group/overarching consultations Ongoing since Spring 2012Ongoing since Spring 2012

• Executive Order promoting int’l regulatory May 2012May 2012 cooperation issued by President Obama

• Work plans detailing implementation Spring/Summer/Fall 2012Spring/Summer/Fall 2012of 29 initiatives completed and released

• Internal progress reporting Canada Canada (monthly) (monthly) / U.S. / U.S. (quarterly)(quarterly)

• RCC Progress Report to Leaders December 2012December 2012

Further information is available at Further information is available at www.actionplan.gc.ca/PSECwww.actionplan.gc.ca/PSEC

Status of the RCC’s Work

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RCC Joint Action Plan:The Progress Report

• RCC Progress Report to Leaders – released December 14, 2012 - updates stakeholders on the first year of RCC implementation

• Overall good progress; new directions demonstrated, for example, in:– crop protection products - simultaneous submissions in both countries– veterinary drugs - simultaneous reviews by regulators for three drugs– a pilot project for the joint inspection of non-Canadian and non-U.S. flagged

vessels entering the Great Lakes-St. Lawrence Seaway

• Development of systemic alignment mechanisms seen as key as work progresses

• Commitment to improved communications and stakeholder engagement in both Canada and the U.S. – frequent, regular updates to be provided

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Looking AheadLooking Ahead

Next year – key RCC objectives:

1. Sustained efforts on Work Plan implementation

2. Increased focus on ongoing mechanisms (goal is to gradually change the regulatory culture)

3. Development of a go-forward plan for U.S.-Canada regulatory cooperation: 2013 and beyond

4. Enhance level of engagement with stakeholders

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Looking ahead, we need to enhance regulatory cooperation, over time, in four key functional aspects of regulatory business:

Cooperation in regulatory system relianceCooperation in regulatory system reliance • Reduce and eliminate duplicative requirements by recognizing success of

each others’ work

Cooperation in regulatory standard-settingCooperation in regulatory standard-setting• Partner on regulatory standards development, conformance (i.e. testing),

and implementation/ enforcement tools

Cooperation in product reviews and approvalCooperation in product reviews and approval• Collaborate on aligning submissions, analysis, and approval processes

Cooperation in managing 3Cooperation in managing 3rdrd country import risks country import risks• Share common requirements and approaches, share monitoring and

compliance initiatives, reallocate resources to address 3rd country risks

Ongoing alignment in four key areas

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Supporting ongoing alignment through horizontal enablers

• As regulators work towards achieving ongoing alignment on specific issues within the RCC Action Plan, a number of cross-cutting challenges have emerged:– How can we share confidential information between

regulators?– How can we cooperate financially to support

regulatory cooperation? (e.g., pay third parties together, or pay each other)

– How can we cooperate during the regulation-making process? (process alignment)

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Enabling financial cooperation

• What is required to enable Canada-U.S. financial cooperation?– What gaps/barriers in authorities and practices currently prevent

this?

• What options or tools can we develop to enable departments to create cooperative financial arrangements with US counterparts?– joint contracting of third parties;– fund transfers or contracts between government agencies (e.g.,

spending, receiving or pooling funds); and – collection and disbursement of third-party fees.

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Breaking down a thorny problem – our approach

What are the options to enable new funding arrangements to support regulator-to-regulator cooperation?

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Issue breakdown – level 2

What are the options to enable new funding arrangements to support regulator-to-regulator cooperation?

What fund sharing requirements would be driven by ongoing regulatory cooperation?

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Issue breakdown – level 2

What are the options to enable new funding arrangements to support regulator-to-regulator cooperation?

What are the impacts/boundaries of statutory and policy frameworks?

What fund sharing requirements would be driven by ongoing regulatory cooperation?

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Issue breakdown – level 2

What are the options to enable new funding arrangements to support regulator-to-regulator cooperation?

What are the impacts/boundaries of statutory and policy frameworks?

What tools and authorities have been used in this, or analogous, areas to create financial arrangements in the past? What are their strengths and limitations?

What fund sharing requirements would be driven by ongoing regulatory cooperation?

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Issue breakdown – level 2

What are the options to enable new funding arrangements to support regulator-to-regulator cooperation?

What are the impacts/boundaries of statutory and policy frameworks?

What tools and authorities have been used in this, or analogous, areas to create financial arrangements in the past? What are their strengths and limitations?

What fund sharing requirements would be driven by ongoing regulatory cooperation?

What new or modified tools and authorities could be added to provide optimum coverage, flexibility and risk mitigation in the four areas of regulatory cooperation?

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Project work plan

Analysis & Recommendations

Set up Diagnosis and Option development

April May – July

Diagnosis and Option Development Set up

July – October

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Diverse and experienced membership

Regulatory departments

Legal and policy experts

U.S.

Health Canada Transport Canada Natural Resources Canada Environment Canada Canadian Food Inspection Agency

Privy Council Office Treasury Board of Canada Secretariat Department of Justice Department of Foreign Affairs and International Trade

OMB Other government experts as identified by OMB TBWG members

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Additional ThoughtsAdditional Thoughts

• Developments point to a gradual change in regulatory culture: cooperation as an emerging norm

– Consistent with policy direction from President Obama and Prime Minister Harper

• Creativity/adjustments will be key to continued progress

• Enhanced dialogue/activities between our regulators is a really good thing

– Increases chances of alignment, even in non-Work Plan areas – Enables us to spot potential issues earlier and make necessary

environmental, health, and safety improvements – Will save resources over the long-term– Improves ability to influence development of global regulatory norms

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RCC Canadian Secretariat at

rcc-ccr@pco-bcp.gc.ca Website: www.actionplan.gc.ca/RCC

For More InformationFor More Information

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The The Shared VisionShared Vision – – Regulatory Cooperation Council and Regulatory Cooperation Council and

Beyond the Border Action PlansBeyond the Border Action Plans