Guidelines on International Regulatory Obligations and Cooperation

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Purpose

These Guidelines on International Regulatory Obligations and Cooperation interpret the policy requirements in the Cabinet Directive on Streamlining Regulation (CDSR) pertaining to international obligations and international regulatory cooperation (IRC). They are intended to assist managers, functional specialists, and regulatory staff to understand and comply with these requirements. These guidelines also clarify expectations of the Treasury Board of Canada Secretariat when exercising its challenge function on regulatory proposals.

Context

CDSR Commitment to Canadians and International Regulatory Obligations and Cooperation

The CDSR begins with an overall commitment to Canadians: "The Government of Canada is committed to protecting and advancing the public interest by working with Canadians and other governments to ensure that its regulatory activities result in the greatest overall benefit to current and future generations of Canadians."

This commitment will be met through a number of principles and actions:

• protect and advance the public interest;
• promote a fair and competitive market economy;
• make decisions based on evidence;
• create accessible, understandable, and responsive regulation;
• advance the efficiency and effectiveness of regulation; and
• require timeliness, policy coherence, and minimal duplication.

Respecting international obligations and international regulatory cooperation must be understood in the context of this commitment, and the principles and actions listed above. The CDSR and these Guidelines encourage greater regulatory compatibility when it can provide the greatest overall benefits to Canadians.

Under these guidelines and the CDSR, Canada will maintain its high regulatory standards. Departments and agencies will continue to pursue Canada's policy objectives and maintain required levels of protection, while identifying opportunities for greater international cooperation.

The activities that departments and agencies must undertake to meet the international regulatory obligations and cooperation (IROC) requirements of the CDSR should also be achieved in ways that maintain public confidence in the Canadian regulatory system.

As such, analysis supporting regulations that pursue greater compatibility and that aim to meet other IROC objectives should clearly demonstrate to decision makers the benefits, costs, and risks of these approaches.

Legal and Policy Requirements for Regulators

The CDSR committed the government, among other things, to "require timeliness, policy coherence, and minimal duplication throughout the regulatory process by consulting, coordinating, and cooperating across the federal government, with other governments in Canada and abroad, and with businesses and Canadians," when regulating. This commitment is a recognition that:

• many problems require intergovernmental or even international solutions;
• multiple regulatory regimes can lead to duplication and waste;
• Canada has binding trade obligations that affect the way it can regulate; and
• regulatory cooperation can help regulatory departments and agencies enhance the effectiveness of the programs for which they are accountable.

The requirements of the CDSR detailed in Section 3 below are a reflection of this broad commitment.

Regulatory Compatibility: AnOpportunity for Regulators

By taking a strategic, proactive approach to achieving greater regulatory compatibility with key international counterparts, departments and agencies can reach policy goals more readily, with lower costs to the government and to Canadians.

Furthermore, IRC is necessary to facilitate compliance with applicable international treaty law and its implementation in Canada. It can result in better-informed decision making through access to regulatory resources of international bodies and other countries (e.g. assessment results, analysis, people). It can lead to greater transparency and predictability of regulatory practices and allow Canada to contribute its expertise and promote its best regulatory practices internationally, thus influencing standards elsewhere.

By reducing obstacles to trade, IRC can also enhance the competitiveness of Canadian goods and services. Improved government efficiency and more effective resource allocation in the development, implementation, and enforcement of regulations can follow.

The CDSR and these Guidelines also set out expectations regarding the way IRC is to be achieved. They encourage departments and agencies to:

• take IRC into account throughout the entire life cycle of regulating-development, implementation, evaluation, and review;
• think strategically about how IRC can assist in achieving regulatory outcomes;
• establish regulatory compatibility as a goal for regulators to achieve through the design of regulations and through ongoing regulatory cooperation activities with key international counterparts;
• actively consider IRC in the ongoing management of regulatory programs, e.g. when developing or renewing compliance and enforcement policies, technical guidelines, and procedures that are put in place to implement regulations; and
• regularly assess the effectiveness of their IRC activities, determine which have yielded positive outcomes, and make adjustments as needed.

In striving for greater regulatory compatibility with our key international counterparts, it is recognized that there are cases where the pursuit of sound policy objectives may require unique Canadian standards or regulations. In these cases, a clear rationale for this unique approach must be evident in the regulatory analysis.

Considerations in Choosing Partners for Cooperation

IRC includes a wide range of activities or practices such as the sharing of information; collaboration on scientific work; common data collection, risk assessment, or compliance methods; joint reviews; and development of standards. It also includes work with international counterparts to build regulatory capacity or provide technical assistance, thus contributing to the improvement of international regulatory governance practices. Departments and agencies have a wide range of existing and potential international partners to choose from to engage in cooperation.

North America

The United States is Canada's largest economic partner and we share one of the world's largest and most comprehensive trading relationships. North American Free Trade Agreement (NAFTA) working groups carry out a number of initiatives to further regulatory cooperation between Canada, Mexico, and the United States. NAFTA countries share many of the same regulatory objectives and have extensive networks of cooperation within and outside of the NAFTA structure. However, opportunities for greater regulatory cooperation remain. A more deliberate approach to regulatory cooperation within North America will provide additional benefits by eliminating unnecessary duplication and differences in regulatory measures, and by improving regulatory outcomes through enhanced information exchange and coordination.

European Union

While regulatory cooperation within North America is important, the European Union is also a major trading partner. It often leads in setting international standards. This relationship has been recognized in agreements such as the Government of Canada-European Commission Framework on Regulatory Cooperation and Transparency. This agreement seeks "[...] to address new challenges and opportunities by enhancing regulatory co-operation, and to work towards preventing and eliminating unnecessary barriers to trade and investment while ensuring better quality and effective regulations to achieve public policy objectives."

Emerging markets

Departments and agencies should also be aware of the competitive challenges and opportunities from emerging and expanding economies (e.g. China, India, Brazil, or Russia). IRC efforts should be geared to ensuring that Canadians receive adequate protections on the products and services imported from these countries and that Canadian products, services, and investors have ready access to these emerging markets.

International standards and multilateral engagement

Canada has a long-standing record as an important contributor to multilateral fora (e.g. the Codex Alimentarius Commission, the Organisation for Economic Co-operation and Development [OECD], and the International Telecommunications Union). Departments and agencies should continue to actively engage in international standard-setting and harmonization initiatives aimed at improving international regulatory consistency and finding cooperative approaches to global challenges.

Engaging multilaterally informs Canadians of regulatory practice and can improve Canadian regulatory outcomes. For example, Canada's engagement in the OECD enhances Canada's leadership role by building international partnerships and influencing the development of international standards and regulatory best practices at the international level. In addition, regulators should be aware of how international standards development may affect regional markets (e.g. NAFTA) and commerce with major trading partners (e.g. the United States, the European Union, and emerging economies).

In some cases, Canada may be the first country considering a regulatory response to address an issue. While exercising leadership is important, departments and agencies should consider if it would be more beneficial to work in collaboration with international counterparts to develop a solution.

Guidelines to Interpreting CDSR Requirements

These guidelines are to be used with the Tools for International Regulatory Cooperation (the Tools; under development) when implementing and assessing IRC strategies, and include further explanation of the various forms of IRC.

Compliance With International Obligations

This section of the CDSR refers to obligations that are not discretionary and are legally binding on the Government of Canada. The CDSR lists a number of requirements relating to compliance with international obligations and identifies which departments and agencies can best provide advice on them (see Appendix B).

Departments and agencies are to respect Canada's international obligations in such areas as human rights, health, safety, security, international trade, and the environment. They must also implement provisions related to these obligations in all stages of regulatory activity.