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.
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.
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.