Regulatory Cooperation Council and Enabling Financial Cooperation TBWG April 23 rd , 2013

1. Regulatory Cooperation Council and Enabling Financial CooperationTBWGApril 23rd, 2013

2. 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) • 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 Plan”) • Action Plan on Perimeter Security and Economic Competitiveness (“Beyond 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

3. The Initial RCC Joint Action PlanA starting point for change 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

4. What are the Potential Benefits of Regulatory Cooperation? 1. Manufacturing sector competitiveness and retail sector efficiency • Decreased production costs • Increased competitiveness • Aligned product approvals and standards • Regulatory alignment and ongoing cooperation provide direct benefits in two areas: 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 consumers • Greater access and choice • Combined expertise of Canadian and U.S. regulators

5. Status of the RCC’s Work • RCC requests public/stakeholder input Spring 2011 • Binational working groups established Mid-2011 • Consultations summary report released August 2011 • RCC Joint Action Plan released December 2011 • Formal stakeholder meetings January 2012 • Working Group/overarching consultations Ongoing since Spring 2012 • Executive Order promoting int’l regulatory May 2012cooperation issued by President Obama • Work plans detailing implementation Spring/Summer/Fall 2012of 29 initiatives completed and released • Internal progress reporting Canada (monthly) / U.S. (quarterly) • RCC Progress Report to Leaders December 2012 Further information is available at www.actionplan.gc.ca/PSEC

6. 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

7. Next year – key RCC objectives: Sustained efforts on Work Plan implementation Increased focus on ongoing mechanisms (goal is to gradually change the regulatory culture) Development of a go-forward plan for U.S.-Canada regulatory cooperation: 2013 and beyond Enhance level of engagement with stakeholders Looking Ahead

8. Ongoing alignment in four key areas Looking ahead, we need to enhance regulatory cooperation, over time, in four key functional aspects of regulatory business: Cooperation in regulatory system reliance • Reduce and eliminate duplicative requirements by recognizing success of each others’ work Cooperation in regulatory standard-setting • Partner on regulatory standards development, conformance (i.e. testing), and implementation/ enforcement tools Cooperation in product reviews and approval • Collaborate on aligning submissions, analysis, and approval processes Cooperation in managing 3rd country import risks • Share common requirements and approaches, share monitoring and compliance initiatives, reallocate resources to address 3rd country risks

9. 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)

10. 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.

11. Breaking down a thorny problem – our approach What are the options to enable new funding arrangements to support regulator-to-regulator cooperation?

12. Issue breakdown – level 2 What fund sharing requirements would be driven by ongoing regulatory cooperation? What are the options to enable new funding arrangements to support regulator-to-regulator cooperation?

13. Issue breakdown – level 2 What fund sharing requirements would be driven by ongoing regulatory cooperation? What are the impacts/boundaries of statutory and policy frameworks? What are the options to enable new funding arrangements to support regulator-to-regulator cooperation?

14. Issue breakdown – level 2 What fund sharing requirements would be driven by ongoing regulatory cooperation? What are the impacts/boundaries of statutory and policy frameworks? What are the options to enable new funding arrangements to support regulator-to-regulator cooperation? 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?

15. Issue breakdown – level 2 What fund sharing requirements would be driven by ongoing regulatory cooperation? What are the impacts/boundaries of statutory and policy frameworks? What are the options to enable new funding arrangements to support regulator-to-regulator cooperation? 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 new or modified tools and authorities could be added to provide optimum coverage, flexibility and risk mitigation in the four areas of regulatory cooperation?

16. Project work plan April May – July July – October Set up Diagnosis and Option Development Analysis & Recommendations Diagnosis and Option development Set up

17. Diverse and experienced membership Regulatory departments • Health Canada • Transport Canada • Natural Resources Canada • Environment Canada • Canadian Food Inspection Agency Legal and policy experts • Privy Council Office • Treasury Board of Canada Secretariat • Department of Justice • Department of Foreign Affairs and International Trade U.S. • OMB • Other government experts as identified by OMB • TBWG members

18. Additional 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

19. For More Information RCC Canadian Secretariat at rcc-ccr@pco-bcp.gc.caWebsite: www.actionplan.gc.ca/RCC

20. The Shared Vision – Regulatory Cooperation Council and Beyond the Border Action Plans