Regulatory Reconciliation & Cooperation - Canadian Free Trade Agreement

Regulatory Reconciliation and Cooperation

The Canadian Free Trade Agreement (CFTA) establishes a regulatory reconciliation process that will help to address barriers to trade that companies may experience when doing business across provincial and territorial borders.

FIVE-YEAR ANNIVERSARY:

The RCT is having its five-year anniversary this year helping to address regulatory barriers to trade in Canada. Since 2017, the RCT has endorsed 11 Reconciliation Agreements, covering 15 Work Plan items, achieving, among other things:

Consistent health and safety standards for workers related to fall protection; first aid; head, foot, eye, hearing or head protection; personal flotation devices and life jackets;
Simplified processes to register pressure equipment for boilers, pressure vessels and fittings across jurisdictions;
Alignment of energy efficiency regulations for household appliances such as washers and dryers, ovens and ranges, refrigerators, microwave ovens, freezers and dishwashers;
Consistent markings to ensure safety for users of waterways regulated by the federal and provincial or territorial governments.

These agreements are resulting in positive economic impact for many sectors across Canada. In the case of the construction codes agreement, limiting variations and aligning adoption is estimated to result in an annual economic benefit of $750 million to $1 billion by 2028.

As required by the CFTA, a five-year review of the operation and effectiveness of the RCT is underway and will be completed later this year.

Work continues to advance on seven reconciliation and two cooperation work plan items to support occupational health and safety, transportation, and construction.

How it works:

1. The potential barrier to trade is identified

Based on information provided by stakeholders or other sources, a potential barrier to internal trade is identified by a province, territory or the federal government. A diverging or duplicative regulation that impedes the flow of goods is an example of the kind of barrier that the process seeks to address.

2. Governments work to establish a reconciliation agreement

Once a barrier to trade has been identified, a government (federal, provincial or territorial) can submit the matter to the Regulatory Reconciliation and Cooperation Table (RCT) for reconciliation. The RCT is a federal-provincial-territorial body established by the CFTA to oversee the regulatory reconciliation process and promote regulatory cooperation across Canada.

Once barriers are submitted for reconciliation, participating CFTA governments and their relevant regulators begin negotiations toward a reconciliation agreement. The reconciliation agreement details how the barrier to trade will be addressed (e.g., mutual recognition, harmonization, or some other method), which governments will participate in the reconciliation agreement, and the timelines for its implementation. Governments may opt out of negotiations if they do not have an existing measure to reconcile or determine that reconciliation is not a desirable option for their jurisdiction.

3. The barrier to trade is reconciled

Once implemented, the reconciliation agreement will effectively remove the barrier to trade between participating governments. CFTA governments that agree to adopt the reconciliation agreement will be bound to adhere to the commitments that it contains.

ANNUAL REPORTS:

Work Plans:

RECONCILIATION AGREEMENTS:

Once negotiated by technical working groups, Reconciliation Agreements are then ‘endorsed’ by the RCT. Endorsement is an important administrative step in the reconciliation process whereby RCT representatives of the participating Parties to the Reconciliation Agreement ‘endorse’ that the content of the Agreement meets the requirements of the CFTA. By endorsing an Agreement, RCT representatives also indicate their consent to having the Reconciliation Agreement sent to their Parties for signature, if their Party has a measure to reconcile and have not taken an exception.

While an important step, the endorsement of a Reconciliation Agreement by an RCT representative does not bind the representative’s government to the Agreement. An Agreement must be signed (ratified) by government for it to come into effect in that jurisdiction.